Ameripride Svc Inc v. Valley Industrial, et al

Filing 941

ORDER signed by Judge Lawrence K. Karlton on 9/6/2012 DENYING 923 Renewed F.R.Cv.P. Rule 50(b) Motion for Judgment; DENYING 924 Motion to Amend the Judgment pursuant to F.R.Cv.P. Rule 59(e); GRANTING 928 Motion for Order Assigning Causes of Action and Rights to Payment. (Michel, G)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 AMERIPRIDE SERVICES, INC., A Delaware corporation, NO. CIV. S-00-113 LKK/JFM 12 Plaintiff, 13 v. 14 15 VALLEY INDUSTRIAL SERVICE, INC., a former California corporation, et al., O R D E R 16 Defendants. / 17 18 AND CONSOLIDATED ACTION AND CROSS- AND COUNTER-CLAIMS. / 19 20 Pending before the court are the following motions brought by 21 Defendant Texas Eastern Overseas, Inc. (“TEO”), both of which are 22 opposed by Plaintiff AmeriPride: (1) a renewed motion for judgment 23 as a matter of law, pursuant to Fed. R. Civ. P. 50(B); and (2) a 24 motion to amend or alter the judgment, pursuant to Fed. R. Civ. P. 25 59(E). 26 See Def’s Mots., ECF Nos. 923, 924. Also pending before the court is Plaintiff’s motion for an 1 1 order directing Defendant TEO to assign to AmeriPride causes of 2 action and rights to payment owned by TEO, brought pursuant to Cal. 3 Civ. Proc. § 708.510. 4 opposes Plaintiff’s motion. 5 For the reasons See Pl’s Mot, ECF No. 928. provided herein, the Defendant TEO court: (1) denies 6 Defendant’s renewed motion for a judgment as a matter of law; (2) 7 denies Defendant’s motion to amend or alter the judgment; and (3) 8 grants Plaintiff’s motion for an order assigning TEO’s causes of 9 action against its insurers, and resulting rights to payment. 10 I. TEO’s Fed. R. Civ. P. 50(B) Renewed Motion for Judgment as a 11 Matter of Law 12 To “preserve its right to appeal the issue,” Defendant TEO 13 brings this renewed motion for a judgment as a matter of law, 14 pursuant to Federal Rule of Civil Procedure 50(b). Def’s Mot., ECF 15 No. 923. 16 of Section 113 of CERCLA, Plaintiff AmeriPride failed to show: (1) 17 what portion, if any, of the settlements that it paid to Cal-Am and 18 Huhtamaki were for reimbursement of monies paid by Huhtamaki or 19 Cal-Am to supply replacement water; and (2) that the replacement 20 water was needed to protect human health or the environment. Thus, 21 TEO seeks reversal of the court’s ruling that AmeriPride was 22 entitled to contribution from TEO for the $10.25 million that 23 AmeriPride paid in settlement to Huhtamaki and Cal-Am Water, Co. 24 Defendant TEO argues that, contrary to the requirements Federal Rule of Civil Procedure 50 applies to cases tried 25 before a jury and is, therefore, not applicable to this case. 26 See Fed. R. Civ. P. 50. Although a party may move for judgment as 2 1 a matter of law during a bench trial, pursuant to Federal Rule of 2 Civil Procedure 52(c), Rule 52(c) motions are properly brought 3 before the close of evidence.1 4 Because Defendant TEO lacks a procedural basis for bringing this 5 motion, Defendant’s motion is denied. 6 II. 7 Judgment Evidence has closed in this case. TEO’s Fed. R. Civ. P. 59(E) Motion to Amend or Alter the 8 Defendant TEO brings this motion to amend or alter the 9 judgment, pursuant to Federal Rule of Civil Procedure 59(e). Def’s 10 Mot., ECF No. 924. 11 credited 12 Chromalloy and Petrolane, by subtracting the settlement amount 13 received ($3.25 million) from the total costs to be apportioned 14 between TEO and AmeriPride and, as a result, AmeriPride will pay 15 only 41% of the clean up costs, as opposed to the 50% of clean up 16 costs for which the court determined AmeriPride was responsible. 17 TEO requests that the court amend the judgment to apply the $3.25 18 million settlement credit after, instead of before, apportioning 19 liability. the Defendant argues that the court incorrectly settlement monies received by AmeriPride, from 20 Under Federal Rule of Civil Procedure 59(e), a party may move 21 to have the court amend its judgment within twenty-eight days after 22 1 23 24 25 26 Federal Rule of Civil Procedure 52(c), entitled, “Judgment on Partial Findings,” provides: “If a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue. The court may, however, decline to render any judgment until the close of evidence.” 3 1 entry of the judgment. Fed.R.Civ.P. 59(e). Although a district 2 court “enjoys considerable discretion in granting or denying the 3 motion,” amending a judgment after its entry is “an extraordinary 4 remedy which should be used sparingly.” 5 Herron, 634 F.3d 1101, 1111 (9th Cir. 2011) (citing McDowell v. 6 Calderon, 197 F.3d 1253, 1255 n.1 (9th Cir. 1999) (en banc) (per 7 curiam)). 8 amendment is necessary to correct manifest errors of law or fact 9 upon which the judgment rests. Allstate Ins. Co. v. A Rule 59(e) amendment may be appropriate where the Id. 10 In its prior order, the court calculated the total amount 11 subject to equitable apportionment by adding the following costs: 12 • and remediation costs through August 2010; 13 14 • • $474,730 incurred by AmeriPride for regulatory the $8,250,000 that AmeriPride paid to Huhtamaki to settle all claims Huhtamaki had against AmeriPride; 17 18 the oversight costs through September 2010; 15 16 the $7,570,921 incurred by AmeriPride for investigation • the $2,000,000 that AmeriPride paid to Cal-Am Water to 19 settle all claims that Cal-Am Water Co. had against 20 AmeriPride; 21 • the $446,656.84 paid by AmeriPride for investigation and 22 remediation at the AmeriPride site since August 2010; 23 and 24 25 26 • the $16,604.52 paid by AmeriPride for regulatory oversight of the AmeriPride site since January 2011. Order, ECF No. 915, at 8, 11. 4 The sum of these amounts is 1 $18,758,912.36. 2 Before apportioning liability, the court subtracted the 3 $3,250,000 that AmeriPride received in settlements from Chromalloy 4 and Petrolane because “[b]oth settlements related to the pollution 5 at issue in the instant case” and “defendants are entitled to a 6 credit for those sums.” 7 amount subject to equitable apportionment was $15,508,911.52. Id. 8 at 11.2 9 court found them, “the fairest apportionment [wa]s to divide Id. Thus, the court found that the total The court further determined that, given the facts as the 10 responsibility equally” between the parties and, therefore, each 11 party was responsible for $7,754,456.18 of the costs expended thus 12 far, excluding the interest on these past costs, for which the 13 court found TEO additionally responsible. Id. at 14. 14 If, as Defendant TEO suggests, the court applies the $3.25 15 million settlement credit after, as opposed to before, apportioning 16 liability, the calculation proceeds as follows: 17 • The initial amount calculated subject to equitable 18 apportionment is $18,758,912.36. 19 between the parties, each party becomes initially liable 20 for $9,379,456.18. 21 • When divided equally Because the court found that each party is responsible 22 for 50% of the damages, the $3.25 million that 23 AmeriPride received in settlements from Chromalloy and 24 25 26 2 Upon recalculation, the court notes that it made a minor calculation error in this regard; this number should properly be $15,508,912.36–-a difference of 84 cents. 5 1 Petrolane is split in half, such that each party 2 receives the benefit of one-half of the $3.25 million 3 received by AmeriPride.3 4 $1,625,000. 5 • Diminishing each Half of $3.25 million is parties initial liability of 6 $9,379,456.18 by $1,625,000 results in each party being 7 ultimately 8 interest. 9 expended, the result of this calculation is that TEO is 10 liable to AmeriPride for $7,754,456.18, not including 11 interest. liable for $7,754,456.18, exclusive of Because AmeriPride’s costs have already been 12 That is, the court reaches the same number when taking the $3.25 13 million settlement received by AmeriPride into account both before 14 and after apportioning liability. 15 Defendant TEO’s alternative calculation appears to be premised 16 on the assumption it should be credited 100% of the benefits 17 received by AmeriPride from its settlement with Chromalloy and 18 Petrolane. 19 costs between the parties, TEO requests that the court reduce TEO’s 20 portion by the full $3.25 million, which would result in TEO being 21 allocated a “$6,129,456.18 share of incurred costs.” 22 ECF No. 924, at 3. That is, from the initial $9,379,456.18 allocation of Def’s Mot., Defendant argues that, if “AmeriPride receives 23 24 25 26 3 This 50% allocation of the benefit AmeriPride received through settlement is fair and proper, given that the amounts that AmeriPride paid in settlements to Huhtamaki and Cal-Am Water Co. were included in the initial costs, the burden of which was also be split equally between the parties. 6 1 a credit for half the $3.25 million for which it was already 2 reimbursed,” 3 reimbursement because AmeriPride already received the full benefit 4 of these settlement monies.” 5 arguing that, instead of AmeriPride receiving half the benefit of 6 the original $3.25 million settlement, TEO should receive the full 7 benefit of those settlement monies, despite the court’s equal 8 allocation of responsibility between the parties. such an allocation would Id. at 6. constitute “double Defendant appears to be 9 TEO’s reference to Boeing Co. v. Cascade Corp., 207 F.3d 1177, 10 1190 (9th Cir. 2000), works against TEO’s own argument. In Boeing, 11 the Ninth Circuit determined that the district court incorrectly 12 “double counted” settlement monies received by plaintiff when the 13 district court deducted the settlement from plaintiff’s total 14 expenditure before applying the 70:30 allocation of responsibility 15 between the parties, because the district court’s calculation 16 failed to split the settlement monies received according to the 17 70:30 allocation as well. See id. (“[T]here was a failure to count 18 once the $2.5 million [collected by plaintiff in settlement], 19 because the district court did not split that portion of the 20 response costs 70:30.”). 21 $3.25 million received by AmeriPride in settlement according to the 22 court’s determined equal allocation of responsibility between the 23 parties and, thus, neither party receives more of a benefit from 24 AmeriPride’s settlement with Chromalloy and Petrolane than the 25 other. 26 Here, however, the court has split the The court considers its allocation of 7 settlement monies 1 received by AmeriPride, from Chromalloy and Petrolane, to be a fair 2 and equitable apportionment between the parties. 3 Rule 59(e) motion to amend or alter the judgment, ECF No. 924, is 4 denied. 5 III. AmeriPride’s Cal. Civ. Proc. § 708.510 Motion for TEO’s 6 Assignment of Causes of Action and Rights to Payment 7 In Plaintiff AmeriPride’s motion, Thus, Defendant’s brought pursuant to 8 California Civil Procedure Code § 708.510, Plaintiff requests that 9 the court issue an order directing Defendant TEO to assign to 10 AmeriPride: (1) TEO’s cause of action, and resulting right to 11 payment, against Central National for breach of contract under the 12 insurance policy issued by Central National Insurance Company 13 (“Central National”); (2) TEO’s cause of action, and resulting 14 right to payment, against Central National for breach of the 15 covenant of good faith and fair dealing; (3) TEO’s cause of action, 16 and resulting right to payment, against Granite State Insurance 17 Company (“Granite State”) for breach of contract under one or more 18 excess comprehensive general liability policies; and (4) TEO’s 19 cause of action, and resulting right to payment, against Granite 20 State for breach of the covenant of good faith and fair dealing. 21 Pl’s Mot., ECF No. 928. 22 A. Standard for § 708.510 Motion Assigning Causes of Action 23 and Resulting Rights to Payment 24 Whether Plaintiff is entitled to an assignment order is 25 governed by Federal Rule of Civil Procedure 69(a)(1), which in turn 26 makes California law applicable. 8 Fed.R.Civ.P. 69(a)(1). 1 California Code of Civil Procedure § 708.510 is the relevant 2 state law articulating the requirements for obtaining an assignment 3 of rights. 4 It provides, in relevant part: Except as otherwise provided by law, upon application of the judgment creditor on noticed motion, the court may order the judgment debtor to assign to the judgment creditor . . . all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments, including but not limited to the following types of payments: (1) Wages due from the federal government that are not subject to withholding under an earnings withholding order. (2) Rents. (3) Commissions. (4) Royalties. (5) Payments due from a patent or copyright. (6) Insurance policy loan value. 5 6 7 8 9 10 11 12 13 Cal.Civ.Proc. § 708.510. 14 Although the court may take into consideration all relevant 15 factors in determining whether to grant a motion for assignment, 16 the sole constraints placed on the court are that the right to 17 payment be assigned only to the extent necessary to satisfy the 18 creditor’s money judgment and that, where part of the payments are 19 exempt, the amount of payments assigned should not exceed the 20 difference between the gross amount of the payments and the exempt 21 amount. 22 01753, 2012 WL 1292473, at *3 (E.D. Cal. April 16, 2012) (citing 23 Sleepy Hollow Inv. Co. No. 2 v. Prototek, Inc., No. 03-cv-4792, 24 2006 WL 279349, at *2 (N.D. Cal. Feb. 3, 2006); Cal. Civ. Proc. § 25 708.510(d)). 26 708.510 that it “provides a new procedure for reaching certain Passport Health Inc. v. Travel Med, Inc., No. 2:09-cv- The California Legislature explained in creating § 9 1 forms of property that cannot be reached by levy under writ of 2 execution . . . . It also provides an optional procedure for 3 reaching assignable forms of property that are subject to levy . 4 . . . This remedy may be used alone or in conjunction with other 5 remedies provided in this title for reaching rights to payment. . 6 . . ” 7 5808, 2009 WL 2213678, at *2 (C.D. Cal. July 9, 2009) (citing 8 Legislative Committee Comment to Cal. Civ. Proc. § 708.510). 9 UMG Recordings, Inc. v. BCD Music Group, Inc., No. 07-cv- The plain language of § 780.510 contemplates that an 10 assignment order can be based on contingent rights. Greenbaum v. 11 Islamic Republic of Iran, 782 F.Supp.2d 893, 896 (C.D. Cal. 2008). 12 As set forth below, California law indicates that these contingent 13 rights include causes of action, the success of which remain 14 undetermined. 15 In California, a “chose in action,” also known as a “thing in 16 action,” is statutorily defined as “a right to recover money or 17 other personal property by a judicial proceeding.” Baum v. Duckor, 18 Spradling & Metzger, 72 Cal.App.4th 54, 64 (Cal.Ct.App. 1999) 19 (citing Cal. Civ. Code § 953). 20 the basic rule that assignability of “things in action” is the 21 rule; nonassignability is the exception, and is confined to wrongs 22 done to the person, the reputation, or the feelings of the injured 23 party, and to contracts of a purely personal nature, like promises 24 of marriage. 25 Cal.App.3d 389 (Cal.Ct.App. 1976)). 26 action against an insurer of a non-personal nature, as well as Underlying California case law is Id. at 65 (citing Goodley v. Wank & Wank, Inc., 62 10 Put another way, causes of 1 damages arising therefrom of a non-personal nature (e.g., not 2 arising 3 California. 4 Cal.4th 1252, at 1261, 1263 (Cal. 2006). from personal torts) are considered assignable in See Essex Ins. Co. v. Five Star Dye House, Inc., 38 5 Indeed, California statutes provide that “all property of a 6 judgment debtor is subject to enforcement of a money judgment,” 7 Cal. Civ. Proc. Code § 695.010; “‘[p]roperty’ includes . . . 8 personal property and any interest therein,” Cal. Civ. Proc. Code 9 § 680.310; “‘[p]ersonal property’ includes . . . intangible 10 personal property,” Cal. Civ. Proc. Code § 680.290; and “‘[g]eneral 11 intangible’ . . . includ[es] things in action,” Cal. Civ. Proc. 12 Code § 680.210; Cal. Com. Code § 9102(42); see also Cal. Civ. Proc. 13 Code § 17(b)(3) (“The words ‘personal property’ include . . . 14 things in action”). 15 The granting of an assignment order functions as, essentially, 16 a placeholder for a judgment creditor; when the judgment creditor 17 seeks to actually enforce his rights against an obligor, an obligor 18 may then raise any relevant defenses against such enforcement. 19 Greenbaum, 782 F.Supp.2d at 895. 20 Detailed evidentiary support is not required under section 21 708.510, but some evidentiary support is still needed; section 22 708.510 refers to a “payment due or to become due,” which suggests 23 some degree of concreteness to the expected payment is required. 24 Legal Additions LLC v. Kowalski, No. 08-cv-2754, 2011 WL 3156724, 25 at *2 (N.D. Cal. July 26, 2011). Certainly, there needs to be more 26 than just speculation before the remedy of an assignment can be 11 1 provided. Id. 2 B. Analysis 3 Judgment was entered for Plaintiff AmeriPride, and against 4 Defendant TEO, on April 20, 2012. 5 has submitted a declaration and evidence indicating that Plaintiff 6 demanded payment of the judgment on June 28, 2012, and that neither 7 Defendant TEO nor its liability insurers have paid monies to 8 AmeriPride toward satisfaction of the judgment. 9 No. 928, Att. 2. 10 Order, ECF No. 915. Plaintiff Zagon Decl., ECF The notice of motion was served on Defendant TEO by electronic 11 filing and by email. See Proof of Service, ECF No. 928, Att. 4. 12 Although § 708.510(b) requires that notice of the motion be served 13 on the judgment debtor “personally or by mail,” TEO has opposed 14 Plaintiff’s motion and has not contested the propriety of service. 15 The court finds that the motion and related papers were properly 16 served. Additionally, the court determines Defendant TEO has claims 17 18 against its liability insurers that are more than merely 19 speculative. 20 claims for purposes of this motion. 21 at 895. Because non-personal causes of action are assignable under 22 California law, and neither TEO’s causes of action against its 23 liability insurers, nor any damages arising from those causes of 24 action, are personal in nature, the court grants Plaintiff 25 //// 26 //// The court need not opine on the merits of those 12 See Greenbaum, 782 F.Supp.2d 1 AmeriPride’s motion for assignment.4 2 IV. Conclusion 3 Accordingly, the court: (1) DENIES Defendant’s renewed motion 4 for a judgment as a matter of law, ECF No. 923; (2) DENIES 5 Defendant’s motion to amend or alter the judgment, ECF No. 924; and 6 (3) GRANTS Plaintiff’s motion for an order assigning TEO’s causes 7 of action against its insurers, and resulting rights to payment, 8 ECF No. 928. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 4 Defendant TEO cites a number of cases which the court distinguishes from the situation here presented for the reasons provided below. Quaestor Investments, Inc. v. State of Chiapas, No. 95-6723, 1997 WL 34618203 (C.D. Cal. Sept. 2, 1997) addressed the question of whether, under California law, the plaintiff could be assigned rights to payment from the State of Chiapas’s account with a Mexican bank having a branch in California. In determining that such a right was not assignable under § 708.510, the court in Quaestor was particularly concerned by plaintiff’s failure to show that any tangible asset of the defendant was “in” the United States. Id. at *7. The case at hand does not address the question of whether the property of a foreign state has assets sufficiently located within the United States to be levied upon. That is, Defendant’s causes of action against its insurers are not protected by the “barrier of foreign sovereign immunity” at issue in Quaestor, the California Supreme Quaestor. Moreover, subsequent to Court indicated that non-personal causes of action against insurers, and non-personal damages arising therefrom, are generally assignable. See Essex Ins. Co., 38 Cal.4th at 1263. Thus, the court declines to apply the rules provided by Quaestor to the motion here presented. The court’s determination, in Chooljian Bros. Packing Co., Inc. v. Tilson, No. 1:08-cv-42, 2009 WL 111909 (E.D. Cal. 2009), that the plaintiffs could not gain title to trademarks for the plaintiff’s own use, is also inapposite. The rule in Chooljian coheres with a longstanding tenet of California patent law that carves an exception from the general assignability of rights of action for the “fruits of a man’s own invention.” See, e.g., Pacific Bank v. Robinson, 7 P.C.L.J. 392, 57 Cal. 520, 524 (Cal. 1881) (internal citations omitted). No such fruits are at issue here and Defendant’s reliance on Chooljian is, therefore, misplaced. 13 1 The following rights are assigned by TEO to AmeriPride: 2 • TEO’s cause of action, and resulting right to payment, 3 against Central National for breach of contract under 4 the 5 Insurance Company (“Central National”), policy number 6 GLA 751305; 7 • insurance policy issued by Central National TEO’s cause of action, and resulting right to payment, 8 against Central National for breach of the covenant of 9 good faith and fair dealing; 10 • TEO’s cause of action, and resulting right to payment, 11 against 12 affiliated company, (“Granite State”) for breach of 13 contract under one or more excess comprehensive general 14 liability policies, policy nos. 6178-0360 (June 2, 1978- 15 June 2, 1979); 6179-1308 (June 2, 1979–June 2, 1980); 16 6180-2185 (June 2, 1980-June 2, 1981); 6181-3019 (June 17 2, 1981-June 2, 1982); and 6182-3654 (June 2, 1982-June 18 2, 1983) issued by Granite State (the “Granite State 19 Policies”); and, 20 • Granite State Insurance Company, and AIG TEO’s cause of action, and resulting right to payment, 21 against Granite State for breach of the covenant of good 22 faith and fair dealing. 23 24 The assignment is only to the extent necessary to satisfy Plaintiff’s money judgment and interest accrued thereunder. 25 IT IS SO ORDERED. 26 DATED: September 6, 2012. 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 15

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