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)

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