Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-02389/USCOURTS-caed-2_02-cv-02389-18/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:6901 Resource &amp; Recovery Act

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

CALIFORNIA DEPARTMENT OF TOXIC

SUBSTANCES CONTROL,

Plaintiff,

v. NO. CIV. S-02-2389 LKK/DAD

PAYLESS CLEANERS; COLLEGE

CLEANERS; HEIDINGER CLEANERS;

NORGE VILLAGE CLEANERS; CAVA,

INC., a California corporation;

LOBDELL CLEANERS; CITY OF CHICO;

NORVILLE R. WEISS; JANET L. WEISS; 

PAUL A. TULLIUS; VICTORIA TULLIUS;

ROBERT H. HEIDINGER; INEZ N. O R D E R

HEIDINGER; 5TH AND IVY, a general

partnership; RICHARD C. PETERS and

RAMONA W. PETERS, individually and

as Trustees of the Peters Family

Trust; BETTY M. ROLLAG; RANDALL 

ROLLAG; and TAMI ROLLAG,

Defendants.

 /

AND RELATED COUNTER-CLAIMS.

 /

Third party plaintiffs Richard Peters and Ramona Peters ("the

Peters" or "plaintiffs") are defendants in a cost recovery suit

Case 2:02-cv-02389-LKK -DAD Document 320 Filed 08/03/07 Page 1 of 5
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regarding perchloroethylene ("PCE") contamination in the City of

Chico, California. The Peters filed a cross complaint naming

various defendants, including Borg-Warner Corporation, as

potentially responsible parties due to their alleged manufacture

of dry cleaning materials containing PCE. Pending before the court

is a motion to dismiss pursuant to Federal Rule of Civil Procedure

12(b)(2), 12(b)(4), and 12(b)(5) filed by Burns International

Services Corporation ("Burns"), which, as explained below, has been

mistaken by plaintiffs for the Borg-Warner Corporation named in

their complaint. The court resolves the matter on the parties'

papers without oral argument. For the reasons set forth below, the

motion to dismiss is granted.

The present dispute arises from the Peters' attempt to find

and serve the successor-in-interest to Borg-Warner Corporation,

which operated Norge Division ("Norge"), a manufacturer of dry

cleaning machinery, in the 1960s. The Peters have attempted to

serve process on Burns, believing it to be a successor-in-interest

to the Borg-Warner Corporation. Based on the evidence submitted,

however, it is clear that Burns is not a successor-in-interest to

the Borg-Warner Corporation that operated Norge Division.

In order to properly serve process on an entity, plaintiffs

"must illustrate that a series of purportedly separate corporations

are in fact bound by continuous chains." Hickory Travel Systems

v. Tui Ag, 213 F.R.D. at 547, 553-54 (N.D. Cal. 2003). Here, Burns

is not bound by a continuous chain to the Borg Warner Corporation

that operated Norge Division. While Burns was also once named

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"Borg Warner Corporation," its corporate chain of existence is

wholly separate from the chain containing the Borg Warner

Corporation alleged in the complaint to have operated Norge

Division. In other words, this is simply a case of mistaken

identity.

As indicated in the certificates of incorporation and

amendment provided by Burns, Burns is a company that evolved from

a distinct entity called AV Hastings Corporation. AV Hastings was

first incorporated in 1987 -- seventeen years after the facts

alleged in the complaint. Decl. of Michael Moirano ("Moirano

Decl.") ¶¶ 9-12. Plaintiffs' confusion stems from a series of name

changes AV Hastings underwent beginning in the 1980s. In 1987, AV

Hastings was renamed Borg-Warner Holdings Corporation, and in 1988,

renamed Borg-Warner Corporation. Id. ¶¶ 9-11. In 1993, its name

was changed again to Borg Warner Security Corporation, and, in

1999, changed once more to its current name, Burns International

Services Corporation. Id. ¶¶ 12, 13.

This corporate chain is distinct from the chain containing the

Borg-Warner Corporation that controlled Norge division in the early

1960s. That Borg-Warner Corporation ceased to exist in 1987, when

it merged into BW Transmissions & Engine Components Corporation,

with BW Transmissions & Engine Components Corporation serving as

the surviving entity. Moraino Decl. ¶¶ 5, 14. This merged entity

underwent a series of name changes and eventually became known as

Borg Warner Morse Tec Inc., a company that still exists today. Id.

¶¶ 5-8.

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The Peters maintain that Burns is a successor-in-interest to

a company that operated Norge based on the following theory.

Plaintiffs allege that the Norge Division became part of Borg

Warner Security Corporation before being sold to Fedders

Corporation in 1968. They base this allegation solely upon the

following statement from Fedders' discovery response: 

Fedders admits that it is a successor-in-interest to

Norge Sales Corporation, Inc. which was subsequently

made a division of Borg-Warner Security Corporation and

then sold to Fedders Corporation in 1968. 

Decl. of Joseph Adams. ("Adams Decl."), Ex. L 3:9-12. Because

there is an entity named Borg Warner Security Corporation within

Burns' corporate history, plaintiffs claim that Burns' is therefore

a successor-in-interest to an entity which controlled Norge

division.

As Burns argues, however, the inclusion of the word "Security"

within the name of the company that sold Norge to Fedders is plain

error. The Borg Warner Security Corporation to which Burns is a

successor was not (and could not have been) involved in the

transaction concerning Norge, for the following reasons. 

First, the 1968 purchase agreement for Norge Division, which

plaintiffs themselves have provided, indicates that the sale of

Norge to Fedders was not completed by an entity named Borg Warner

Security Corporation, but rather an entity simply named Borg Warner

Corporation. Adams Decl. ¶ 6, Ex. C. A Wall Street Journal

article detailing the sale, dated July 3, 1968 also lists "Borg

Warner Corporation" as the seller, with no mention of an entity

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called Borg Warner Security Corporation. Id., Ex. C. This

information is consistent with Burns' characterization of the

corporation's history. 

Second, Burns presents evidence that the entity called Borg

Warner Security Corporation to which Burns is a

successor-in-interest did not exist until 1993, many years after

the sale of Norge to Fedders was made. Moraino Decl., Ex. F

(certificate of amendment showing name change to Borg Warner

Security Corporation, dated 1993). Plaintiffs have not presented

evidence to refute any of this information or to otherwise

establish that Borg Warner Security Corporation existed before

1993. 

In short, Burns is not a successor-in-interest to the

Borg-Warner Corporation that operated Norge Division, and is

therefore not a proper party to this action. See Hickory Travel

Systems, 213 F.R.D. at 553-54. Accordingly, the court orders as

follows:

1. Burns' motion to dismiss (Doc. 225) is GRANTED.

2. The hearing on the motion to dismiss currently set for

August 13, 2007 is VACATED.

3. The default judgment entered against Borg-Warner

Corporation (Doc. 208) is VACATED.

IT IS SO ORDERED.

DATED: August 3, 2007.

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