Court Opinion

ID: 9746016
Source: CourtListenerOpinion
Date Created: 2023-08-27 13:50:59.225409+00
Date Added: 2024-06-11T07:25:07.799403
License: Public Domain

*334McADAMS, J., Concurring.
As the majority observes, plaintiffs contend on appeal that the trial court erred: (1) in sustaining demurrers to their public nuisance claims; (2) in denying them leave to amend to allege trespass; and (3) in granting summary judgment on their remaining causes of action for strict products liability, negligence, fraud, and unfair competition. Addressing those contentions, the majority (1) agrees in part with the first contention, concluding that the representative plaintiffs, seeking abatement only, stated a cause of action for public nuisance; (2) disagrees with plaintiffs’ second contention, concluding that the trial court properly denied leave to amend to assert trespass; and (3) agrees in part with plaintiffs’ third contention, reversing summary judgment as to plaintiffs’ causes of action for strict products liability, negligence, and fraud, but not as to their unfair competition claim.
I concur in the result reached by the majority, and I am in accord with much of its analysis. I write separately because I respectfully disagree with the majority’s reasoning on several points.
I. JUDGMENT AFTER DEMURRER: THE REPRESENTATIVE PUBLIC NUISANCE CAUSE OF ACTION
I join with my colleagues in holding that allegations of affirmative promotion of the hazardous use of a product can form the basis of a public nuisance cause of action for abatement, as brought here by the three public entities on behalf of the People.
However, I disagree with one aspect of the majority’s analysis. The majority opinion impliedly accepts the argument that a public nuisance cause of action for abatement could never be based on the “mere manufacture and distribution” of a dangerous product or the “failure to warn of its hazards.” (Maj. opn., ante, at p. 310.) I write separately to express my view that there may be circumstances, not appearing in the pleadings currently before us, where a public entity could successfully plead such a nuisance action, particularly where the product is widely recognized as hazardous; the defendant or defendants are clearly responsible for manufacturing, producing or supplying the defective product or failing to warn of its dangers; the product poses a significant and imminent risk of death, serious injury or major property damage; and the remedy sought is abatement rather than damages. Where such a “ticking time bomb” exists, a products liability action, requiring injury before relief, offers no shield. An entity charged with protecting the public should not have to wait for the destructive results before taking action.
*335II. DENIAL OF LEAVE TO AMEND: PROPOSED CAUSE OF ACTION FOR TRESPASS
I agree with the majority’s view of the parties’ contentions concerning the plaintiffs’ proposed cause of action for continuing trespass.
IH. GRANT OF SUMMARY JUDGMENT
A. The Strict Liability And Negligence Causes Of Action
I disagree with my colleagues’ analysis as it relates to plaintiffs’ strict products liability and negligence causes of action. The majority concludes that those claims have not yet accrued, based on the lack of physical injury to plaintiffs’ buildings and thus the absence of appreciable harm. (Maj. opn., ante, at p. 325.) In reaching that conclusion, the majority rejects San Francisco Unified School Dist. v. W. R. Grace & Co. (1995) 37 Cal.App.4th 1318, 1333 [44 Cal.Rptr.2d 305] (SFUSD). It does so on the ground that SFUSD is inconsistent with the California Supreme Court’s opinion in Aas v. Superior Court (2000) 24 Cal.4th 627 [101 Cal.Rptr.2d 718, 12 P.3d 1125] (Aas).) I find no such inconsistency. Moreover, I believe that SFUSD is well reasoned and persuasive. I would apply it in this case.
In explaining my divergence from the majority, I begin with the fundamental legal principles that govern here.
1. Governing Principles
a. Elements of the causes of action
As the majority correctly observes, the elements of a negligence claim are wrongdoing (duty and breach), causation, and damages. (Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 614 [76 Cal.Rptr.2d 479, 957 P.2d 1313].) The elements of a cause of action for strict products liability are wrongdoing (a defect in design or manufacture, or a failure to warn), causation, and damages. (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 560 [34 Cal.Rptr.2d 607, 882 P.2d 298].)
It is important to distinguish wrong from harm; “in unusual cases, a plaintiff may be aware of wrongdoing before damage arises.” (SFUSD, supra, 37 Cal.App.4th at p. 1333.) But the cause of action is not complete until there is damage: “appreciable, nonspeculative, present injury is an essential element of a tort cause of action.” (Aas, supra, 24 Cal.4th at p. 646; accord, Jimenez v. Superior Court (2002) 29 Cal.4th 473, 483 [127 Cal.Rptr.2d 614, 58 P.3d 450] (Jiminez).)
*336b. Statute of limitations
“The resolution of a statute of limitations defense is typically a factual question for the trier of fact. However, summary judgment is proper if the court can draw only one legitimate inference from uncontradicted evidence about the limitations issue.” (SFUSD, supra, 37 Cal.App.4th at pp. 1325-1326.)
Generally speaking, the limitations period commences when all the necessary elements of the cause of action are in place; however, accrual may be delayed until the plaintiff’s later discovery of the wrong and its cause. (See Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1111 [245 Cal.Rptr. 658, 751 P.2d 923] [discovery rule in personal injury action].) “In tort actions, the statute of limitations commences when the last element essential to a cause of action occurs.” (SFUSD, supra, 37 Cal.App.4th at p. 1326.) Where the last essential element is damage, “the infliction of appreciable and actual harm, however uncertain in amount, will commence the statutory period.” (Davies v. Krasna (1975) 14 Cal.3d 502, 514 [121 Cal.Rptr. 705, 535 P.2d 1161].)
c. Appreciable Harm
Appreciable harm may result from either (i) physical property damage or (ii) involuntary out of pocket losses. (See Aas, supra, 24 Cal.4th at p. 646.) In contrast to the opinion of my colleagues in the majority, I believe both are present here.
(i) Property Damage
As the court in SFUSD explained: “As the limitations period cannot begin to run until damage occurs, we must consider what constitutes the element of damage for purposes of strict liability and negligence. In a landmark strict liability case that has since achieved nationwide influence, the California Supreme Court ruled that plaintiffs may recover in tort for physical injury to person or property, but not for purely economic losses that may be recovered in a contract action. (Seely v. White Motor Co. [(1965)] 63 Cal.2d [9], 18-19 [45 Cal.Rptr. 17, 403 P.2d 145] [Seely].) Since Seely was announced 30 years ago, other California courts have applied the same reasoning to other tort causes of action, such as negligence.” (SFUSD, supra, 37 Cal.App.4th at p. 1327.) Seely’s “reasoning ultimately outlined the framework of our economic loss rule, which the United States Supreme Court later adopted in large part for purposes of tort liability under admiralty jurisdiction.” (Jimenez, supra, 29 Cal.4th at p. 482.)
The economic loss rule—as outlined more than forty years ago in Seely— was recently reaffirmed by the California Supreme Court, in its 2000 decision *337in Aas, and again in the 2002 Jiminez case. (See Aas, supra, 24 Cal.4th at pp. 632, 639, 646; Jimenez, supra, 29 Cal.4th at p. 483.) Under that rule, “recovery under the doctrine of strict liability is limited solely to ‘physical harm to person or property.’ ” (Jimenez, at p. 482, quoting Seely, supra, 63 Cal.2d at p. 18.) “Seely has been widely cited in federal, California and other state decisions for this physical injury/economic loss distinction in tort/contract cases.” (SFUSD, supra, 37 Cal.App.4th at p. 1328.)
Applying the general principles in Seely, the SFUSD court said this: “Until physical injury occurs—until damage rises above the level of mere economic loss—a plaintiff cannot state a cause of action for strict liability or negligence.” (SFUSD, supra, 37 Cal.App.4th at p. 1327.) “Once physical injury to property occurs—assuming that damage is the last element of the tort cause of action to occur—the cause of action accrues and the limitations period commences.” (Id. at p. 1329.) In the particular case before it, the court observed: “The injury for which asbestos plaintiffs are being recompensed has been found to be the contamination of their buildings, not the mere presence of asbestos.” (Ibid.)
SFUSD is one of at least two California cases to distinguish between the mere presence of a toxic substance in a structure (an economic loss) and contamination of the structure by that substance (physical injury). (SFUSD, supra, 37 Cal.App.4th 1318 [asbestos in buildings]; (Transwestern Pipeline Co. v. Monsanto Co. (1996) 46 Cal.App.4th 502, 527 [53 Cal.Rptr.2d 887] (Transwestem) [PCB’s in pipelines].) Under the reasoning of those cases, “economic loss occurs when the toxic substance is merely present but property damage occurs when the toxic substance actually contaminates the plaintiff’s property.” (Transwestern, at p. 527, citing SFUSD, supra, at pp. 1323-1324.)
Thus, the court in SFUSD explained: “In order to be consistent with the principles of Seely, it appears that until contamination occurs, the only damages that arise are economic losses that do not constitute physical injury to property recoverable in strict liability or negligence. Physical injury resulting from asbestos contamination, not the mere presence of asbestos, must have occurred before a cause of action for strict liability or negligence can accrue in an asbestos-in-building case and the limitations period commence.” (SFUSD, supra, 37 Cal.App.4th at p. 1330.) Similarly, in the Transwestem case, the court agreed with the plaintiff’s contention that “PCB contamination constituted property damage, not economic loss,” finding that argument to be “supported by California cases as well as cases from other jurisdictions.” (Transwestern, supra, 46 Cal.App.4th at p. 527.) As the Transwestem court explained, the harm for which plaintiff was seeking indemnity “was clearly in the nature of property damage because the PCB’s contaminated . . . pipelines and the condensate within the pipelines, both of *338which were the property of [plaintiff’s customer]. In this respect at least we see no distinction between PCB contamination and asbestos contamination.” (Id. at p. 530.)
As I see it, SFUSD is not inconsistent with Aas. I therefore disagree with the majority’s contrary conclusion. (Maj. opn., ante, at p. 324.) I offer two reasons for that view.
First, the relevant principles in Aas are not new. As pertinent here, the Aas court simply reaffirmed its 1965 decision in Seely. (Aas, supra, 24 Cal.4th at pp. 632, 639, 646.) SFUSD explicitly followed Seely. (SFUSD, supra, 37 Cal.App.4th at pp. 1324—1325, 1330; see also Transwestern, supra, 46 Cal.App.4th at p. 527.) Because SFUSD is faithful to the principles announced in Seely, it likewise is in harmony with Aas.
Furthermore, the Aas decision makes two references to SFUSD to support its analysis, implicitly endorsing the earlier case. (Aas, supra, 24 Cal.4th at pp. 640, 646.) In each reference, the high court recognizes the appellate court’s distinction between the mere presence of asbestos in a building and contamination of the building resulting from release of the asbestos. The court’s first citation thus reads: “In San Francisco Unified School Dist. v. W.R. Grace & Co. (1995) 37 Cal.App.4th 1318, 1327-1330 [44 Cal.Rptr.2d 305], a public school district could not state a cause of action in negligence or strict liability based on the presence of asbestos products in its buildings, when the products had not contaminated the buildings by releasing friable asbestos.” (Id. at p. 640.) In its second citation, the court says “see San Francisco Unified School Dist. v. W.R. Grace & Co., supra, 37 Cal.App.4th 1318, 1327-1331 [the presence of asbestos products in buildings did not, prior to the release of friable asbestos, constitute actual and appreciable harm under Davies v. Krasna]. . . .” (Id. at p. 646.) Jiminez likewise cites SFUSD, apparently approvingly, though without describing its holding. (Jimenez, supra, 29 Cal.4th at p. 483.)
For these reasons, I do not believe that SFUSD is inconsistent with Aas. In my view, SFUSD remains good law. Together with the Transwestem case, SFUSD supports the view that property damage occurs when a toxic substance previously present in a structure is released, resulting in contamination. (SFUSD, supra, 37 Cal.App.4th at p. 1329; Transwestern, supra, 46 Cal.App.4th at pp. 526, 530.) Such contamination thus constitutes appreciable harm for purposes of accrual of the statute of limitations.
(ii) Out-of-pocket losses
As the Aas court states, “defects that have not ripened into property damage, or at least into involuntary out-of-pocket losses, do not comfortably *339fit the definition of ‘ “appreciable harm” ’—an essential element of a negligence claim.” (Aas, supra, 24 Cal.4th at p. 646.) Inferentially, the converse is also true: an involuntary payment to abate or repair a defect could constitute appreciable harm. That point was left open in Aas, as appears in the high court’s later discussion of Huang v. Garner (1984) 157 Cal.App.3d 404 [203 Cal.Rptr. 800] (Huang). (See Aas, at pp. 648-649.)
In Huang, the appellate court reversed a nonsuit for the defendants, thereby permitting the plaintiffs to offer proof on their claims for the cost of repairing defects in an apartment building. (See Aas, supra, 24 Cal.4th at p. 648.) “Some of the alleged defects had caused property damage, and some had not.” (Ibid.) And some defects were the subject of an abatement notice by local officials, which required the plaintiffs to repair specified problems. (Id. at p. 649; see Huang, supra, 157 Cal.App.3d at p. 424, fn. 13.) The high court criticized Huang’s analysis as “not entirely satisfactory because [some] alleged construction defects in that case had neither caused property damage nor been cited in the notice of abatement. [Citation.] Even accepting for the sake of argument the Huang court’s suggestion that a notice of abatement might suffice to convert repair costs into tort damages, the decision offers no adequate explanation for permitting the plaintiffs, consistently with Seely, supra, 63 Cal.2d 9, to recover repair costs for the other defects that had neither appeared in the notice nor resulted in property damage. Accordingly, we disapprove Huang to the extent it is inconsistent with the views set out in this opinion.” (Aas, supra, 24 Cal.4th at p. 649.) Although the Aas court partially disapproved Huang, it left open the possibility that “a notice of abatement might suffice to convert repair costs into tort damages. . . .” (Ibid.)
In deciding whether out-of-pocket costs represent economic loss or property damage in a given case, it is important to avoid confusing “the measure of the damages with the nature of the damage.” (Transwestern, supra, 46 Cal.App.4th at p. 531.) “ ‘While economic loss is measured by repair costs, replacement costs, loss of profits or diminution of value, the measure of damages does not determine whether the complaint is for physical harm or economic loss. ... In other words, the fact that the measure of the plaintiff’s damages is economic does not transform the nature of its injury into a solely economic loss. . . . Physical harm to property may be measured by the cost of repairing the buildings to make them safe.’ ” (Ibid., quoting Northridge Co. v. W.R. Grace and Co. (1991) 471 N.W.2d 179, 184 [162 Wis.2d 918]; see also, e.g., Collins Development Co. v. D. J. Plastering, Inc. (2000) 81 Cal.App.4th 771, 779 [97 Cal.Rptr.2d 83] [“fact that damages for this physical damage were calculated on the basis of the cost of repair[] ... so that the damage to the other parts of the building would abate did not change the nature of the damage”].)
*3402. Application
With those principles in mind, I turn to the case at hand.
Because this part of the case is before us following defense summary judgment, appellate review is de novo. (See Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334 [100 Cal.Rptr.2d 352, 8 P.3d 1089].) That review follows the same analysis undertaken by the trial court; After identifying the issues framed by the pleadings, the court determines whether the moving defendants have established facts justifying judgment in their favor; if so, the court decides whether the plaintiffs have demonstrated the existence of a triable issue of material fact. (Chavez v. Carpenter (2001) 91 Cal.App.4th 1433, 1438 [111 Cal.Rptr.2d 534].)
Within the context of the issues raised by the pleadings, the first question is whether defendants carried their burden of producing evidence showing that plaintiffs’ negligence and strict products liability claims are time-barred. In my view, they have not.
The defense theory is that the statute of limitations on these causes of action accrued either upon application of the paint, which occurred decades ago, or upon plaintiffs’ discovery of the hazardous nature of the paint that had been applied, which also occurred outside the limitations period. In my view, the defense theory confuses the wrongdoing (providing the toxic material or failing to warn of its hazards) with the injury (appreciable harm). (SFUSD, supra, 37 Cal.App.4th at p. 1333.) Here, defendants offered no evidence on the question of when plaintiffs sustained appreciable harm, which was either when plaintiffs incurred involuntary out-of-pocket costs or when their property suffered damage in the form of contamination.
For these reasons, defendants are not entitled to summary judgment. I would remand the matter with instructions to the trial court to vacate the defense summary judgment on the causes of action for strict products liability and negligence, though on different grounds than the majority.
B. The Fraud Cause Of Action
In light of my conclusions concerning appreciable harm, I would find no reason to construe Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 [22 Cal.Rptr.3d 352, 102 P.3d 268]. I otherwise agree with the majority opinion as to this cause of action, i.e., its discussion beginning with the elements of fraud. (Maj. opn., ante, at pp. 328-329.)
*341C. The Unfair Competition Claim
I agree with the majority’s decision to affirm defense summary judgment as to this claim and its basis for doing so.
In sum, except as discussed above, I join with my colleagues.
A petition for a rehearing was denied March 24, 2006, and respondents’ petition for review by the Supreme Court was denied June 21, 2006, S142578. Baxter, J., and Corrigan, J., did not participate therein.