The Estuary Owners Assn. v. Shell Oil Co.

Filed 6/28/17 Certified for Partial Pub. 7/26/17 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

THE ESTUARY OWNERS
ASSOCIATION et. al.,
Plaintiffs and Appellants, A145516

v. (Alameda County Super. Ct.
SHELL OIL COMPANY, Nos. RG10550407, RG10550416,
RG12628669)
Defendant and Respondent.

In three cases consolidated in the trial court, the Estuary Owners Association
(EOA) and individual owners of condominiums built on the site of a former bulk fuel
distribution terminal sued successive owners and developers of the property, as well as
contractors involved in constructing the condominiums, over alleged contamination of
the soil and groundwater at the site and improper construction of the condominiums.
After appellants settled with various of the developers and other defendants, the trial
court granted motions for summary adjudication and summary judgment in favor of Shell
Oil Company (Shell), the original owner of the property, on the grounds that appellants‘
causes of action against it for negligence and nuisance were barred by a 10-year statute of
repose, and the negligence claims also were barred by a three-year statute of limitations
and failed because Shell did not owe a duty of care to appellants. Appellants argue the
trial court misinterpreted their complaints and misapplied the law on each of these issues.
We agree that the trial court erred in finding the statute of repose applicable but find no
error with respect to the statute of limitations. Accordingly, we will affirm the judgment

1
as to the causes of action for negligence and reverse as to the causes of action for
nuisance.
STATEMENT OF THE CASE AND FACTS
The 100-unit condominium project at issue in this case was owned and used by
Shell as a fuel distribution terminal from 1925 until 1980. Petroleum products were
delivered to the property by pipeline and railcar, and stored in both above ground and
underground storage tanks with a total capacity of 69,730 barrels (2,028,660 gallons). In
1980, the property was purchased by Simmons Terminal Corporation (Simmons), which
continued to use it as fuel distribution terminal for several years. In 1985, the property
was purchased by the John E. and Charlene A. Weber Trust, for use by their demolition
contracting business, ICONCO, Inc. ICONCO continued to use two of the above ground
storage tanks and demolished the others, leaving underground pipelines and facilities in
place. In June 2003, the site was acquired by Signature at the Estuary, LLC (Signature)
for the purpose of building a residential townhouse development.
In anticipation of acquisition and development, Signature‘s environmental
consultant, Lowney Associates, reviewed the history of the site and submitted a
Corrective Action Plan to the California Regional Water Quality Control Board (Water
Board) in October 2002. According to the Water Board‘s findings, releases from the
former bulk fuel terminal had first been reported in 19421 and investigations of soil and
groundwater at the site in 1982,2 19853 and 2001 (for Simmons, Weber Trust and

1
A 1942 report for the Division of Fish and Game Bureau of Fish Conservation
mentioned that an oil separator was being installed at Shell‘s Oakland distributing depot
―after an investigation of oil reaching the estuary was traced to this concern.‖
2
In 1982, then-owner Simmons was required by the Water Board to determine the
source of an oily sheen emanating from a storm drain discharging into the estuary from
the site. Three exploratory borings were drilled and converted into ground water
monitoring wells, and additional monitoring wells were installed in 1985.
3
Additional borings/monitoring wells were installed in 1985 in response to Water
Board requirements. A 1987 compliance monitoring report required ICONCO to
continue operating the ― ‗seawall drainage system‘ and oil-water separator, and that

2
Signature, respectively) found ―widespread petroleum hydrocarbon contamination with
pockets of free product residual in soil and groundwater.‖
Pursuant to the 2002 corrective plan and additional plans approved by the Board,
cleanup activities were performed between September 9 and December 18, 2003. These
included excavation of an approximately 80,000 square foot area of petroleum-impacted
soil to depths ranging from 7 to 12 feet, treatment with ―oxygen release compound‖ to
help degrade petroleum hydrocarbons, and backfill with soil that did not exceed the site
cleanup goals.
As of March 2004, Water Board staff concurred that the first four of six elements
in the corrective plan had been completed. In June 2004, the Water Board issued Order
No. R2-2004-0046, ―Adoption of Final Site Cleanup Requirements‖ for the site.
Signature was named as a discharger ―because it owned the property during or after the
time of the activity that resulted in the discharge, has knowledge of the discharge or the
activities that caused the discharge and has the legal ability to prevent the discharge.‖ In
October 2004, Signature submitted to the Water Board a ―Risk Management Plan‖ which,
among other things, noted that 17 ground water monitoring wells had been installed at the
site in August 2004; a deed restriction had been prepared restricting future activities
related to residual contamination; the Covenants, Conditions and Restrictions (CCRs) for
the residential development would reference the risk management plan; and sellers of the
townhouses would be required to disclose the risk management plan to future buyers.
Deed restrictions were recorded by Signature in November 2004 that detailed the
history of contamination and cleanup activities at the property, set forth restrictions on
development and use of the property, and required future owners and occupants to
execute a written instrument to accompany all purchase agreements or leases related to
the property stating recognition that the property ―contains hazardous materials in soils
and in the groundwater‖ and is subject to the deed restriction. The CCRs for the

absorbent booms continue to be used in the estuary around the storm drain outfall.‘ ‖
ICONCO periodically pumped impacted ground water from the wells.

3
development, recorded in September 2004, specifically referenced the contamination at
the property, the 2004 Water Board order and the risk management plan.4 A 2004 fact
sheet for the development, prepared by Signature‘s environmental consultant, described
the contamination, cleanup activities undertaken, risk management plan and deed
restrictions, and potential risk to occupants. According to this fact sheet, ―no less than
the upper three feet of soil beneath the site consists of either clean imported soil or clean
native soil that did not require excavation,‖ and the Water Board determined that the
cleanup at the site ―satisfied all aspects of the approved cleanup plan.‖ The Water Board
similarly determined that ground water cleanup satisfied the approved goals for
residential use of the property. Groundwater sampling was continuing for a 50-foot strip
along the shoreline because more stringent ecological cleanup goals applied for the
protection of ―ecological receptors‖ such as birds and fish, which would take longer to
meet.
In October 2004, Signature sought reimbursement from Shell for its costs related
to the contamination.5 In July 2005, Signature and Shell executed a settlement agreement
in which Shell denied Signature‘s allegations that its operations on the property caused
and contributed to environmental contamination but agreed to pay Signature $1,250,000.
Shell and Signature each released the other from all claims for ―Covered Costs‖ incurred
by the other relating to the property, defining ―Covered Costs‖ as ―(i) all costs and other
losses incurred prior to [July 1, 2005] associated with the presence, release, migration,
removal or remediation of the Contamination; (ii) groundwater monitoring costs at the
Property incurred after the Effective Date up to but not to exceed $40,000; and (iii)
agency fees and costs relating to environmental oversight of the Property incurred after

4
The CCRs described the Water Board order, imposed an easement for action
necessary to implement requirements of the order and achieve its goals, included
compliance with the order and risk management plan among the enumerated use
restrictions for the property, and required the EOA to notify contractors and employees
about specified portions of the risk management plan.
5
Signature was also pursuing reimbursement from the California Underground
Storage Tank Cleanup Fund.

4
[July 1, 2005] up to but not to exceed $25,000.‖6 All other claims ―associated with the
Property or the Contamination‖ were ―specifically reserved by the Parties.‖
The condominiums were built between 2004 and 2006. In depositions, one
purchaser of a condominium stated that he was told at the time of purchase that
contaminants at the site had been fully remediated, another said he was assured the
environmental remediation mentioned in the documents was ―routine for any
development around the Bay Area,‖ and another said he was rushed through the
paperwork and told everything in it was ―boilerplate.‖
As of 2008, residual concentrations of petroleum related chemicals remained in
the soil, soil gas and groundwater beneath the development. The Water Board
determined that the concentrations in soil and groundwater met the required residential
occupancy goals, but concentrations of certain chemicals in the soil gas exceeded the
Board‘s criteria. In November 2008, Signature informed the Water Board that the
townhouses had been constructed with moisture barriers beneath the building slabs
instead of the vapor/gas barriers called for in the corrective action plan. On November 6,
2008, representatives of the Water Board attended an EOA meeting to explain the history
of contamination and cleanup efforts and address residual contamination at the property.
The Water Board instructed Signature to plan a pilot study to confirm the effectiveness of
a proposed engineering system to prevent migration of vapors into potentially affected
buildings and held a public comment period on the proposed plan.
In June 2011, the Water Board issued Order No. R2-2011-0038, amending the
2004 order by adding Shell as a named responsible party.7 Shell had not been named

6
It was additionally specified that Signature would pursue third parties such as
Simmons, which was responsible for a subsurface release at the property, for costs
incurred in connection with such releases and that the settlement payment was based
primarily on costs and damages incurred by Signature other than in connection with
historic underground storage tank releases. Shell waived any claim for reimbursement
from the Tank Fund relating to the property.
7
Signature Properties, Inc., was also named as a discharger ―because it was so
closely related to Signature at the Estuary, LLC, that the two entities effectively

5
previously because the current owner, Signature, was actively involved with site cleanup,
but Signature had informed the Water Board that it did not have the financial capacity to
fulfill its obligations under the final cleanup order.8 The order amended the groundwater
cleanup standards to protect ―drinking water beneficial use‖ that had previously not been
included because it had been determined that site groundwater did not qualify as a
potential source of drinking water, and added soil gas cleanup standards because
monitoring performed after remedial action at the site indicated residual compounds
presenting concern for vapor intrusion into indoor air. Subsequently, on July 11, 2014,
the Board issued a directive to Shell to submit a work plan including further investigation
into historical data regarding its pipelines. The Board later approved the plan Shell
submitted.
The initial complaints in this case were filed by EOA on December 8, 2010; by
Elaine Kammerer and other homeowners on the same date; and by Beverly Angros and
other homeowners on May 3, 2012. Shell was not initially named as a defendant in the
EOA and Kammerer actions but, as the trial court later noted, was added as a Doe
defendant on January 27, 2012, ―after being ordered by the State to participate in the
cleanup of the property.‖ The operative complaints are the first amended complaint filed
by the Angros plaintiffs on December 20, 2012, the first amended complaint filed by the
Kammerer plaintiffs on March 8, 2013, and the second amended complaint filed by EOA
on January 15, 2014. The three cases were consolidated for pretrial purposes.

functioned as one.‖ Signature Properties, Inc., had begun work with the Board before
Signature at the Estuary, LLC, was formed and acquired the property.
8
The Board‘s order stated that Shell had been the owner and operator of the fuel
distribution terminal from 1925 to 1980 and owned two associated product pipelines that
were used to deliver petroleum products to the terminal; that releases from the terminal
had first been reported in 1942, that ―an oil recovery system consisting of extraction
wells, stormwater drainage controls, oil-water separator and oil absorbent booms‖
reportedly had been operated at the property from the early 1970s to the late 1980s, and
that in addition to fuel tanks and appurtenances on the site, ―a suspected source of
residual petroleum contamination at the site is impacted soil and/or groundwater as a
result of leakage from Shell‘s pipelines.‖

6
 The operative complaints named the same defendants, grouped into four
categories: ―Developer Defendants‖ (Signature, Signature Properties, Inc., Signature
Development Group, Inc., Signature Homes, Inc., James C. Ghielmetti and Michael J.
Ghielmetti),9 ―Design Professionals‖ (TRC Lowney Inc., TRC Solutions, Inc. and KTGY
Group, Inc.),10 ―Subcontractors‖ (Gonsalves & Santucci, Inc., d/b/a ICONCO),11 and
―prior owners, lessors, lessees and/or users of the Subject Property‖ (Shell, John Weber
and Charlene Weber, individually and as trustees of the 1994 John E. Weber and
Charlene A. Weber revocable trust, and ICONCO).12 With respect to Shell, the only
defendant involved in this appeal, the complaints all alleged causes of action for
negligence, private nuisance and public nuisance, and EOA additionally alleged a cause
of action for negligence per se.
The complaints13 alleged that all the defendants ―participated in the development,
design, construction, and/or repair of the Subject Property, and/or in the manufacture

9
Each of these defendants was alleged to be ―doing business as a contractor,
developer, producer and/or seller of homes and/or residences,‖ and the Ghielmettis were
alleged to be alter egos of the ―entity Developer Defendants.‖
10
These defendants were alleged to be ―doing business designing, supervising,
doing general and specialty contractor and subcontractor‘s work, providing engineering
and architectural services, for the construction of residential real property,‖ and the TRC
defendants were alleged to have had responsibility for ―remov[ing] contaminated soil
from the Subject Property.‖
11
This defendant was alleged to do ―general and specialty contractor and
subcontractor‘s work, for the construction of residential real property.‖
12
Shell was described as ―in the business of the manufacture, distribution and sale
of petroleum products and is and was a prior owner, lessor, lessee and/or user of the
Subject Property as a bulk fuel/petroleum storage and/or distribution site.‖
13
For simplicity, we will refer to EOA‘s second amended complaint as
representative, and as ―the complaint.‖ Any material differences in the other operative
complaints will be indicated as relevant.
In addition to the causes of action noted in the text, which were alleged against the
other defendants as well as Shell, all the operative complaints alleged causes of action
against defendants not including Shell: breach of express warranty, negligent
misrepresentation, breach of contract and fraud/non-disclosure (against the Developer

7
and/or supply of materials and components which were made a part of the Subject
property as set forth herein and/or were previously in possession of the Subject Property
as owner, lessor, lessee and/or user of the site.‖ It was alleged that the Developer
Defendants, Design Professionals and Subcontractors ―acted in unity and concert to
produce the Subject Property . . . as part of a planned development‖ and ―the Subject
Properties were manufactured products‖ and these defendants ―were manufacturers,
suppliers and assemblers of said products.‖ While the property was being used in the
manner it was intended to be used, EOA allegedly became aware of deficiencies: The
soil and/or groundwater was contaminated with harmful petroleum-based chemicals; the
site was improperly prepared with regard to removing contaminates and importing clean
fill; the buildings were not constructed with proper vapor and/or moisture barriers
beneath the concrete slabs; the slabs were improperly constructed in that they allowed
excessive moisture and/or vapor containing harmful contaminates to enter the structures;
the tidal influence of the adjacent estuary caused contaminates to permeate the site soil
with fluctuating volume and concentration; and the buildings were inadequately
ventilated given the increased likelihood of harmful vapors entering them.14 It was
alleged that each of the defendants ―failed to satisfy and/or breached‖ their obligations
with respect to conditions of approval for the project, covenants running with the land,
orders from the Board, monitoring conditions at the site, and cleaning up the site, and
attempted to shift responsibility to EOA, creating financial hardship and obligations not

Defendants), breach of implied warranty and breach of contract/third party beneficiary
(against the Developer Defendants, Design Professionals and Subcontractors), and strict
liability/products liability (against the Developer Defendants and Subcontractors). EOA
also alleged causes of action for strict liability (against the Developer Defendants) and
strict liability/products liability (as to the Developer Defendants and Subcontractors).
The individual plaintiffs alleged a cause of action for unfair business practices (Civ.
Code, §§ 17200, 17500) against the Developer Defendants that was not alleged in EOA‘s
complaint.
14
EOA‘s complaint included detailed allegations concerning specific deficiencies
in the construction of the project, alleged against the Developer Defendants only. These
allegations were not included in the complaints of the individual plaintiffs.

8
disclosed at the point of sale. It was further alleged that the defects ―were a result of
deficiencies in the design, development and/or construction and prior use of the Subject
Property,‖ that EOA and its members were not aware of these deficiencies when the
property was purchased, and that the defects made the property ―unsafe, unmarketable
and unsuitable for its intended use.‖
The cause of action for negligence alleged that all the defendants ―participated in
the development, design, construction, renovation, repair and/or sale of the Subject
Property, and/or performed repairs and/or major renovations or improvements and/or in
the manufacture and/or supply of materials and components which were made a part of
the Subject Property,‖ or ―performed works of labor and manufactured and/or supplied
materials, equipment, and/or services necessary for the construction, including
supervision of construction of the Subject Property, or were prior owners, lessors, lessees,
users and/or occupiers of the Subject Property.‖ Based on having undertaken
responsibility and authority for these actions ―and/or based on such prior possession and
use,‖ the defendants owed EOA a duty of care to perform the activities in a ―reasonable,
competent and workmanlike manner so that the completed project would be free from
defects and would require only normal maintenance,‖ and the defendants breached the
duty of care with respect to various aspects of the design and construction of the property,
and ―also contaminated the Subject Property and/or failed to properly clean up the
Subject Property and remove said contamination.‖ Appellants alleged that, exercising
reasonable diligence, they could not and did not discover the nature and cause of the
defects until times within the three years prior to filing the action.
The two causes of action for nuisance alleged that all the defendants interfered
with plaintiffs‘ use and enjoyment of the property by ―developing, designing, and/or
constructing, contaminating, occupying and maintaining the Subject Property in an area
where the soil, air and water is contaminated and harmful to health and safety and was
not properly cleaned and/or decontaminated prior to the construction of the Subject
Property.‖ It was further alleged that the interference was substantial and unreasonable
and required plaintiffs to incur significant expenses for remediation to mitigate, reduce or

9
abate the harm, and that the harm to the property was continuing. The cause of action for
public nuisance additionally alleged that the nuisance affected others who were not
plaintiffs in the action and that the seriousness of the harm outweighed any public
benefit.
The last cause of action applicable to Shell, negligence per se, alleged that all the
defendants were involved with the design and construction of the development in similar
terms to the allegations of the negligence cause of action,15 and that their conduct
violated various codes, regulations, statutes and/or ordinances establishing minimum
building standards and prohibiting ―certain activities to prevent and/or mitigate against
contamination of soil, air and water‖ in order to ―safeguard life, health, property, and
public welfare‖ and protect plaintiffs and others similarly situated from the type of injury
alleged in the complaint.
Shell answered the complaints, denying the allegations and raising a number of
affirmative defenses. On September 9, 2014, Shell moved for summary judgment or
summary adjudication, arguing that the causes of action for negligence, negligence per
se, private nuisance and public nuisance were all barred by the 10-year statute of repose
for claims involving latent construction defects (Code Civ. Proc., § 337.15);16 the causes
of action for negligence and negligence per se were additionally barred by the three-year
statute of limitations (§ 338, subd. (b)); the causes of action for nuisance were also barred
by the three-year statute of limitations except to the extent appellants were pursuing a
theory of continuing nuisance, for which appellants could not recover ―damages sustained
more than three years from the filing of their respective actions,‖ damages based on
15
Specifically, it was alleged that the defendants were ―designers, developers,
builders, contractors, subcontractors, suppliers, manufacturers, or were other persons,
entities or professionals who participated in the process of construction and/or repair
and/or renovation and conversion of the Subject Property and who performed works of
labor and manufactured and/or supplied materials, equipment, and/or services necessary
for the construction, including supervision of construction of the Subject Property or
were prior owner, lessors, lessees, users and/or occupiers of the Subject Property.‖
16
Further statutory references will be to the Code of Civil Procedure unless
otherwise specified.

10
diminution in the value of their property or prospective damages including future
remediation costs; appellants could not establish an essential element of the causes of
action for negligence, private nuisance and public nuisance because Shell did not owe
them a duty of care; and appellants could not establish an essential element of the cause
of action for private nuisance because their ―predecessor-in-interest was aware of and
consented to the use of the property as a fuel distribution terminal when it purchased the
site‖ from Shell.
On March 5, 2015, the day set for hearing on Shell‘s motion for summary
judgment, appellants filed a motion for leave to file a third amended complaint.
Appellants had reached settlements with the Developer Defendants, Design Professionals
and Subcontractors, and the proposed amendment sought to delete the parties that had
settled and two causes of action; add a cause of action for trespass; add Simmons, which
appellants indicated had been added as a Doe defendant on July 9, 2013, but ―erroneously
omitted from the caption of the second amended complaint‖;17 and identify certain Doe
defendants (Shell California Pipe Line Corporation, Shell Pipeline Company, L.P, Shell
Pipeline GP, LLC, Shell California Pipeline Company, LLC and Shell California Pipeline
Company).
The trial court heard arguments on Shell‘s motion for summary judgment and took
it under submission. On March 12, 2015, the court granted the motion for summary
judgment, finding that the negligence causes of action were not supported because Shell
owed no duty of care to appellants and were barred by the applicable three-year statute of
limitations, and that all the causes of action were barred by the 10-year statute of repose
for latent construction defects.18 Judgment for Shell was entered on March 26, 2015.

17
The court noted in its order granting summary judgment that on February 5,
2014, over Shell‘s objection, the court had granted appellants‘ application to substitute
these affiliates of Shell as Doe defendants, with the amendments to be filed no later than
February 24, 2015, but that appellants did not appear to have filed the proposed
amendments prior to the filing of the motion for summary judgment.
18
The trial court denied the motion as to Shell‘s additional arguments.

11
 On April 1, 2015, the court denied appellants‘ motion for leave to amend the
complaint, which it viewed as ―effectively an end-run around the court‘s summary
judgment order.‖ Shell‘s opposition had pointed out, among other things, that the motion
for leave to amend was not filed until after the court had issued its tentative ruling
granting Shell‘s motion for summary judgment.
Appellants filed a motion for new trial on April 24, 2015, asking the court to
vacate its judgment with respect to application of the 10-year statute of repose under
section 337.15 to the claims of continuing nuisance. Appellants argued that the statute of
repose could apply only if construction defects attributable to Shell in the capacity of a
developer were the sole proximate cause of contamination, and there was no evidence
this was the case. Appellants emphasized that Shell was sued in its capacity as a prior
owner, lessor, lessee and/or user of the property and excluded from the definition of
―Developer Defendants,‖ and argued there was no evidence that the contamination that
occurred during Shell‘s ownership of the property was due to construction defects in the
design or development of the property attributable to Shell as opposed to Shell‘s
activities in operating on the site, such as oil spills documented in the record. Shell
maintained it was only required to show that it developed the property and suit was filed
more than 10 years after the terminal was completed, and the burden then shifted to
appellants to raise a triable issue of fact as to ―some other injury or harm that falls outside
of 337.15.‖
The court issued its tentative ruling denying the new trial motion on May 21,
2015, and, after a hearing, entered its order denying the motion on May 27, 2015.
Appellants filed their timely notice of appeal on June 24, 2015.

DISCUSSION
Appellants contend the trial court erroneously read their complaints as alleging
claims against Shell based on construction defects, whereas in fact the gravamen of their
claims is Shell‘s ―negligent mishandling of petroleum products and subsequent failure to

12
remediate, which created a continuing nuisance.‖ As a result of this misreading,
appellants assert, the trial court erroneously applied section 337.15 to bar all their claims.
Additionally, they argue that the trial court, in finding their negligence claims barred by
the three-year statute of limitations, failed to recognize that the claims were for new and
different damage to their property than that associated with Shell‘s pre-1980 activity on
the site. Appellants maintain that they did not experience ―appreciable harm‖ to their
property until their units and common areas were contaminated by the spread of Shell‘s
contamination to the new fill and top soil, and that they did not learn of this damage and
claim against Shell until November 2008 or later.19 Asserting that they raised triable
issues of fact with respect to all these causes of action, appellants seek reversal of the
summary judgment.
―A motion for summary judgment ‗shall be granted if all the papers submitted
show that there is no triable issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.‘ (Code Civ. Proc., § 437c, subd. (c).) A
defendant moving for summary judgment has the initial burden of showing either that
one or more elements of the cause of action cannot be established or that there is a
complete defense. (§ 437c, subd. (p)(2).)‖ (Perry v. East Bay Regional Park Dist.
(2006) 141 Cal.App.4th 1, 8.) ―The moving party must show that under no possible
hypothesis within the reasonable purview of the allegations of the complaint is there a
material question of fact which requires examination by trial.‖ (Chevron U.S.A., Inc. v.
Superior Court (1992) 4 Cal.App.4th 544, 548, overruled on other grounds in Camargo v.
Tjaarda Dairy (2001) 25 Cal.4th 1235, 1245; Shapiro v. Sutherland (1998) 64
Cal.App.4th 1534, 1543.) ―If that initial burden is met, the burden shifts to the plaintiff
to show the existence of a triable issue of fact with respect to that cause of action or
defense. (§ 437c, subd. (p)(2); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th
826, 850–853.)‖ (Perry, at p. 8; Asplund v. Selected Investments in Financial Equities,

19
Appellants also contend the trial court erred in finding Shell had no duty to
avoid or remediate contamination on the site. As will be seen, our resolution of other
issues makes it unnecessary for us to reach the question of duty.

13
Inc. (2000) 86 Cal.App.4th 26, 36.) ―When the defendant, as the moving party, makes
that showing, the burden of proof shifts to the plaintiff, as the opposing party, to show, by
responsive separate statement and admissible evidence, that triable issues of fact exist.
(Lorenzen-Hughes v. MacElhenny, Levy & Co. (1994) 24 Cal.App.4th 1684, 1688; Code
Civ. Proc., § 437c, subd. (o)(2).) ‗ ―[An] issue of fact becomes one of law and loses its
triable character if the undisputed facts leave no room for a reasonable difference of
opinion. [Citation.]‖ [Citation.]‘ (Preach v. Monter Rainbow (1993) 12 Cal.App.4th
1441, 1450.)‖ (Shapiro, at p. 1543.)
― ‗This court reviews de novo the trial court‘s decision to grant summary judgment
and we are not bound by the trial court‘s stated reasons or rationales. (Prilliman v.
United Air Lines, Inc. (1997) 53 Cal.App.4th 935, 951. . . .)‘ (Hersant v. Department of
Social Services (1997) 57 Cal.App.4th 997, 1001 (Hersant).)‖ (Horn v. Cushman &
Wakefield Western, Inc. (1999) 72 Cal.App.4th 798, 805.) ―In performing our de novo
review, we must view the evidence in a light favorable to plaintiff as the losing party
(Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107), liberally construing her
evidentiary submission while strictly scrutinizing defendants‘ own showing, and
resolving any evidentiary doubts or ambiguities in plaintiff‘s favor. (Marshak v.
Ballesteros (1999) 72 Cal.App.4th 1514, 1517; Kaplan v. LaBarbera (1997) 58
Cal.App.4th 175, 179.)‖ (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768–
769.) ―We accept as true the facts alleged in the evidence of the party opposing summary
judgment and the reasonable inferences that can be drawn from them. ([Hersant, at
p. 1001].) However, to defeat the motion for summary judgment, the plaintiff must show
‗ ―specific facts,‖ ‘ and cannot rely upon the allegations of the pleadings. (Ibid.; Snyder
v. United States Fidelity & Guarantee Co. (1997) 60 Cal.App.4th 561, 565.)‖ (Horn, at
p. 805; Regents of University of California v. Superior Court (1996) 41 Cal.App.4th
1040, 1044.) ―[D]ue to the drastic nature of the procedure, all doubts about the propriety
of granting the motion must be resolved in favor of its denial.‖ (Asplund v. Selected
Investments in Financial Equities, Inc., supra, 86 Cal.App.4th at pp. 36–37.)
I.

14
 Section 337.15, subdivision (a), provides: ―No action may be brought to recover
damages from any person, or the surety of a person, who develops real property or
performs or furnishes the design, specifications, surveying, planning, supervision, testing,
or observation of construction or construction of an improvement to real property more
than 10 years after the substantial completion of the development or improvement for any
of the following: [¶] (1) Any latent deficiency in the design, specification, surveying,
planning, supervision, or observation of construction or construction of an improvement
to, or survey of, real property. [¶] (2) Injury to property, real or personal, arising out of
any such latent deficiency.‖
The trial court, in finding that section 337.15 barred this action, viewed appellants‘
claims as based on Shell‘s pre-1980 ―development and use‖ of the property as a bulk fuel
terminal. Appellants contend the trial court misread their complaints, arguing, as they did
in the trial court, that their claims against Shell are based on the theory that the property
became contaminated as a result of fuel spills over the course of the many years Shell
operated a fuel distribution facility on the site, not due to any defect in the design or
construction of the facility itself. In their view, section 337.15 has no application because
they do not allege that Shell‘s liability is related to a construction defect. They further
contend the trial court erred in applying section 337.15 based on Shell‘s ―operation‖ of
the fuel distribution terminal.
Section 337.15 ―was enacted in 1971 by the Legislature to provide a ‗firm and
final‘ outside limitation period for construction suits involving claims for latent defects.
(Lantzy [v. Centex Homes (2003)] 31 Cal.4th [363,] 377.) ‗ ―[T]he purpose of section
337.15 is to protect contractors and other professionals and tradespeople in the
construction industry from perpetual exposure to liability for their work. [Citations.]
The statute reflects a legitimate concern that ‗expanding concepts of liability could
imperil the construction industry unless a statute of limitations was enacted.‘ [Citation.]
Such concerns legitimately include the prohibitive cost of insurance against a perpetual
and never ending risk.‖ [Citation.]‘ (Id., at p. 374.)‖ (Acosta v. Glenfed Development

15
Corp. (2005) 128 Cal.App.4th 1278, 1294; Gundogdu v. King Mai, Inc. (2009) 171
Cal.App.4th 310, 315.)
Section 337.15, by its terms, does not extend protection to a person or entity who
operates an improvement to real property once it has been constructed, only to one who
―develops real property or performs or furnishes the design, specifications, surveying,
planning, supervision, testing, or observation of construction or construction of an
improvement.‖ (§ 337.15, subd. (a), italics added.) In addition to its express language,
this is evident from the statute‘s provisions that the 10-year limitations period begins to
run upon ―the substantial completion of the development or improvement‖ (§ 337.15,
subd. (a)) and ―not later than‖ the earliest of four dates: ―final inspection by the
applicable public agency,‖ ―recordation of a valid notice of completion,‖ ―use or
occupation of the improvement,‖ or ―[o]ne year after termination or cessation of work on
the improvement.‖ (§ 337.15, subd. (g).) ―The date of substantial completion shall relate
specifically to the performance or furnishing design, specifications, surveying, planning,
supervision, testing, observation of construction or construction services by each
profession or trade rendering services to the improvement.‖ (Ibid.) Thus, the critical
point is completion of the improvement, or aspect of the improvement, for which a given
defendant is responsible: The period of repose commences when the specific
improvement alleged to be defective is substantially complete even if it is part of a larger
development that is completed later, and, as to a particular subcontractor, upon
completion of that subcontractor‘s work, not the total development of which it is part.
(Liptak v. Diane Apartments, Inc. (1980) 109 Cal.App.3d 762, 772-773 [damage to home
built in second phase of development due to defective grading and filling of slope in
another part of development several years earlier; repose period began to run as to
grading contractor when grading completed].)
The trial court relied upon Gaggero v. County of San Diego (2004) 124
Cal.App.4th 609 (Gaggero), and Shell argues this case is dispositive. The plaintiffs in
Gaggero purchased property on which the county had previously operated a landfill. (Id.
at p. 613.) Subsequently, structures the plaintiffs had built on the property were damaged

16
by subsidence that the plaintiffs alleged was due to ―defective design and operation‖ of
the landfill, in that decomposing material produced methane gas that created void pockets
in areas beneath the landfill covering. (Ibid.) Gaggero affirmed the trial court‘s
summary judgment in favor of the county based on section 337.15, holding that ―[a]ny
claim growing out of failure on the part of the county in its construction or operation of
the landfill was governed by section 337.15.‖ (Gaggero, at p. 619, italics added.)
Gaggero did not elaborate upon its references to the defendant‘s ―construction or
operation‖ of the landfill or explain why ―operation‖ of an improvement would come
within the terms of section 337.15. The issue in that case was whether the landfill was an
―improvement‖ within the meaning of section 337.15. The court observed that the
―broad interpretation‖ cases had given to the term ―improvement‖ was consistent with the
history and purpose of section 337.15 to ― ‗ ―protect developers of real estate against
liability extending indefinitely into the future.‖ ‘ ‖ (Gaggero, supra, 124 Cal.App.4th at
pp. 616-617, quoting Martinez v. Traubner (1982) 32 Cal.3d 755, 760.)
The only other case we are aware of that refers to section 337.15 as applicable to a
defendant‘s ―operation‖ of an improvement is a later decision by a different panel of the
same court that decided Gaggero, also involving a landfill, which quotes Gaggero on this
point. (San Diego Unified School Dist. v. County of San Diego (2009) 170 Cal.App.4th
288 (San Diego Unified).) In San Diego Unified, the county had operated a landfill on
property leased from the school district; after the landfill ceased operation, the school
district built a school on the property. (Id. at p. 295.) When environmental legislation
enacted years later led to the imposition of monitoring and cleanup responsibilities, the
parties entered an agreement dividing these between them. (Ibid.) Ultimately, the school
district sued the county, alleging various causes of action based on alleged violations of
the agreement and interference with the school district‘s use of the property. (Id. at
pp. 296-297.) San Diego Unified held that the landfill was an ―improvement‖ within the
meaning of section 337.15, but reversed the trial court‘s order finding all the claims
barred because the claims went ―beyond those of damage caused by a latent deficiency in
an improvement to real property,‖ instead alleging violations of the parties‘ cost sharing

17
agreement and obligations imposed by environmental legislation and regulations that
would apply even if the landfill was designed, constructed and operated perfectly. (San
Diego Unified, at pp. 305-306, 308-311.)
Like Gaggero, San Diego Unified did not elaborate upon the reference to
―operation‖ of the improvement falling within the reach of section 337.15. Significantly,
however, both cases considered the ―date of completion‖ of the improvement to be the
date the landfill ceased operation. (San Diego Unified, supra, 170 Cal.App.4th at
pp. 293, 295; Gaggero, supra, 124 Cal.App.4th at p. 613.) San Diego Unified quoted
Gaggero‘s reasoning in finding that ―the County‘s construction and operation of ‗the
landfill was an improvement within the meaning of section 337.15‘ ‖: ― ‗While the
county‘s primary goal may not have been to obtain a profit from eventual sale of the
landfill, in filling it, covering it and selling it, the county was engaged in making the real
property suitable for further use by others. Section 337.15 and the cases which have
interpreted it make clear, in enacting the statute, the Legislature‘s unambiguous intention
was to put a temporal limit on liability for individuals and entities engaged in these sorts
of purposeful alterations to and transfers of real property.‘ ‖ (San Diego Unified, at
p. 304, quoting Gaggero, at pp. 617-618.)20 As we understand it, Gaggero and San
Diego Unified viewed operation of the landfill to be an inherent part of the
improvement‘s construction; the landfill was ―complete‖ so as to trigger the 10-year
period of section 337.15 at the point the construction and operation of the landfill ceased
and the property became available for other uses.
In our view, these cases cannot be taken outside the context of landfills to
conclude that ―operation‖ of an improvement to real property after it has been fully
constructed comes within the ambit of section 337.15. The purpose of section 337.15 and
its definition of the ―substantial completion‖ that begins the running of the 10-year period
make clear that the statute‘s protection applies to claims for damage due to defects in

20
The San Diego Unified court noted that it did not interpret this statement in
Gaggero as limiting coverage under section 337.15 to situations in which the property at
issue has been transferred. (San Diego Unified, supra, 170 Cal.App.4th at p. 304.)

18
how an improvement was designed and constructed, not to claims based on how the
improvement was used after its construction is complete and independent of the manner
in which it was designed and constructed. For this reason, the trial court in the present
case erred in holding that to the extent appellants‘ claims were based upon ―fuel spills
during the operation of the fuel terminal, not upon faulty construction of the terminal,‖
they would still be barred by section 337.15.
Section 337.15 can bar only claims alleging injury caused by latent construction
defects. (San Diego Unified, supra, 170 Cal.App.4th at p. 301.) As summarized in San
Diego Unified, section 337.15 bars ―(a) an untimely action for damages (b) based on a
latent deficiency in construction of an improvement, (c) or based on property injury
arising out of any such latent deficiency.‖ (San Diego Unified, at pp. 301, 305-306;
Chevron U.S.A. Inc. v. Superior Court (1994) 44 Cal.App.4th 1009, 1015, fn. 2
(Chevron).) The San Diego Unified court explained that its task was to ―analyze the
claims pled by the District to determine whether the only rights asserted are those arising
out of a latent construction defect,‖ in which case ―section 337.15 may provide a bar for
an action brought more than 10 years after the substantial completion of the
improvement. Alternatively, if the District is not contending the landfill was a
defectively constructed improvement, the District may be able to plead rights arising out
of some other kind of legal entitlement, separate from the manner of construction of the
improvement.‖ (San Diego Unified, at p. 305, italics added.) Section 337.15 does not
bar actions for property damage ―filed more than 10 years after the improvement was
completed, if the recovery is sought on some other legal basis not identified in this
statute.‖ (San Diego Unified, at p. 306, italics added; Grange Debris Box & Wrecking
Co. v. Superior Court (1993) 16 Cal.App.4th 1349, 1354 [section 337.15 inapplicable to
action alleging ―contamination of soil and water, not construction defects‖; cross
complaint alleging negligent contamination ―while excavating and preparing the site for

19
construction of an office building‖ within scope of section 337.15], overruled on other
grounds in Lantzy v. Centex, supra, 31 Cal.4th at p. 367.)21
Here, it is clear that appellants‘ claims against Shell, as stated in the complaint, are
based on its contamination of the site and failure to remediate that contamination.22 The
question is whether appellants‘ complaints allege that Shell contaminated the property
due to a construction defect in the fuel distribution facility, as Shell argues and the trial
court found, or due to ongoing business activities on the site, distinct from the manner in
which the facility itself was constructed, as appellants contend. The complaint does not
spell out how Shell contaminated the property other than to state that Shell owned and/or
used the site as a bulk fuel storage and/or distribution site.

21
Chevron, commenting on recent cases involving ground contamination that did
not discuss section 337.15, similarly emphasized the need to determine exactly what the
plaintiffs alleged: ―If raised as a defense, section 337.15 would bar recovery if the
defendants were involved in development, were charged with latent construction defects
causing injury, and were not in possession . . . at the time the deficiencies constituted the
proximate cause supporting the action.‖ (Chevron, supra, 44 Cal.App.4th at p. 1015, fn.
2, italics added.) The Chevron court observed that ―[n]either Mangini, which involved
allegations of burning, burying, and otherwise discharging toxic wastes upon the property
(Mangini [v. Aerojet-General Corp. (1991)] 230 Cal.App.3d [1125,] 1132) nor Newhall,
which alleged contamination of soil and groundwater during operation of a natural gas
processing plant (Newhall [Land & Farming Co. v. Superior Court (1993)] 19
Cal.App.4th [334,] 339) was a construction defect case,‖ while several other cases that
―may have involved leakage from underground storage tanks‖ (KFC Western, Inc. v.
Meghrig (1994) 23 Cal.App.4th 1167, 1171; Wilshire Westwood Associates v. Atlantic
Richfield Co. (1993) 20 Cal.App.4th 732, 737-738; Capogeannis v. Superior Court
(1993) 12 Cal.App.4th 668, 672) simply did not mention section 337.15. (Chevron, at
p. 1015.)
22
Shell argues that appellants‘ opening brief offers a ―strawman argument‖ to
―manufacture error where none exists‖ by claiming Shell was not protected by section
337.15 because it was not involved in constructing the condominium development and
was not within the ―protected class‖ of section 337.15 that extends to developers, not
owners or occupiers of land. As we understand it, appellants‘ point was not that section
337.15 only protects ―developers of real estate‖ and never land owners or occupiers, but
that they never claimed Shell was liable based on its having developed a defective
improvement, only that its activities as a landowner and occupier caused the alleged
contamination.

20
 Appellants argue that in order to establish an affirmative defense under section
337.15, Shell had the burden of producing evidence that the contamination resulted from
defective construction of the fuel distribution terminal and, unless it did so, appellants
had no further obligation to demonstrate that the contaminate resulted from business
operations unrelated to the construction of the facility. Shell insists that it satisfied its
burden of establishing all elements of the defense by demonstrating through undisputed
facts that it ―developed a bulk fuel terminal on the Property‖ and ―operated the fuel
terminal‖ there until it sold the property and operating fuel terminal to Simmons in 1980,
and that appellants did not initiate any of the consolidated actions until 2010. The burden
then fell to appellants, Shell maintains, to produce evidence raising a triable issue of fact
as to whether the contamination resulted from a latent construction defect.
Shell‘s argument might be availing if appellants‘ claims were based solely upon
the theory that the property was contaminated during Shell‘s ownership and use due to a
defect in construction of the fuel distribution terminal. This appears to be the conclusion
the trial court drew, but neither the reasoning expressed in its orders nor Shell‘s
arguments here support that conclusion. The court noted that appellants‘ opposition to
summary judgment ―did not explain what claims, other than for a latent defect in the
property, plaintiffs have pleaded against [Shell].‖ At the page cited by the court,
appellants‘ opposition stated, ―[p]laintiffs‘ claims against Shell are not for latent
construction defects and therefore the ten (10) year statute of repose for such actions does
not apply.‖ While it is true that appellants did not further elaborate at this point, it is
clear from their argument at the hearing on the motion for summary judgment that, in
their view, they never alleged a claim against Shell based on construction defect:
Counsel repeatedly reiterated at the hearing that the claims against Shell were based on
contamination of the property that resulted not from a defect in the construction of the
fuel distribution facility but from negligence during the course of operations on the
property that resulted in petroleum being spilled on the ground.
Moreover, we are unable to find support in the record for the trial court‘s
conclusion that appellants ―disclaimed‖ reliance on the ―prior contamination‖ theory in

21
favor of a theory that Shell‘s liability was based on its failure to disclose the extent of
contamination and failure to comply with the duties imposed after the Board named it a
responsible party in 2011. The court cited two pages of the opposition, at which
appellants complained that Shell had ―frustrated [their] efforts to obtain historical
information concerning prior contamination and spills at the project during its
ownership,‖ that despite this discovery issue appellants also alleged Shell was negligent
for failing to disclose to anyone the extent and degree of the contamination ―(i.e.,
disclosure of prior significant product spills)‖ and necessary remediation, and that they
alleged Shell had been negligent for failing to perform its duties as a named responsible
party under the Board‘s directives. But the opposition raised these arguments in addition
to claims based on the original contamination of the property, not in place of those
claims. Notably, Shell does not suggest in its briefs on appeal that appellants disclaimed
reliance upon the prior contamination theory.
Contesting appellants‘ argument that they did not allege liability based on latent
defects against Shell, Shell argues that the negligence and nuisance claims were asserted
against all defendants, ―lumped together indiscriminately in allegations that explicitly
reference damages caused by latent deficiencies.‖ Shell points to three paragraphs in the
cause of action for negligence, and one in the cause of action for nuisance, with emphasis
as follows: ―Defendants . . . and each of them, participated in the development, design,
construction, renovation, repair and/or sale of the Subject Property . . . or were prior
owners, lessors, lessees, users and/or occupiers of the Subject Property‖; ―the design,
materials, and/or construction defects and related damages as described in, and each of
them, were at all material times latent and could not have been discovered by plaintiff
through the exercise of reasonable diligence and/or by reasonable inspection‖; ―as a
proximate result of the defects set forth herein and the conduct of defendants, plaintiff
has suffered damages . . .‖; and ―defendants and each of them, have interfered with and
continue to interfere with plaintiff‘s use and private enjoyment of the Subject Property,
namely by developing, designing, and/or constructing, contaminating, occupying and
maintaining the Subject Property in an area where the soil, air and water is contaminated

22
and harmful to health and safety and was not properly cleaned and/or decontaminated
prior to the construction of the Subject Property as alleged in paragraph 26 above so as to
constitute a private nuisance.‖
To be sure, these allegations, particularly the last one, are sloppy. But as the first
quoted allegation makes clear, the complaints did not attribute each and every action or
status to each and every defendant; it alleges that each and every defendant was
responsible for one or another of the described actions, or held the status of owner,
lessor, lessee, user or occupant. Read as a whole, it is apparent that appellants sought to
impose liability upon certain defendants—denominated developers, design professionals
and contractors—for latent defects in the design and construction of the condominium
development, and upon Shell for contaminating the property and failing to remediate the
contamination. The construction defects alleged in the complaints pertained to the
condominiums; no allegation referenced any construction defect related to Shell‘s fuel
distribution terminal. That Shell ―developed‖ the site is not sufficient if that development
was not alleged to involve a construction defect. At most, the sloppy drafting of the
complaint left some ambiguity as to whether Shell‘s alleged liability was based on
contamination due to a defect in the construction of its facilities or contamination due to
negligent operation of those facilities. But the complaint cannot reasonably be read to
involve only claims based on construction defects. (See San Diego Unified, supra, 170
Cal.App.4th at p. 305.)
As we have said, section 337.15 can provide a bar only to claims based on
construction defects. (San Diego Unified, supra, 170 Cal.App.4th at pp. 305-306, 310-
311 [statute inapplicable to claims based on violation of contractual and statutory duties
to remediate pollution that applied regardless of how perfectly landfill was constructed];
Gaggero, supra, 124 Cal.App.4th at p. 613 [statute barred claims alleging that faulty
construction and operation of landfill resulted in subsidence]; Chevron, supra, 44
Cal.App.4th at p. 1012 [statute barred claims that soil contamination was due to faulty
installation of underground fuel storage tanks on the property].) Since appellants‘ claims
were based on Shell‘s contamination of the site in the course of its business operations,

23
not on a construction defect, the summary judgment cannot be upheld on the basis that all
appellants‘ claims were barred by section 337.15.
II.
Aside from the section 337.15 statute of repose, the trial court found appellants‘
negligence claims barred by the three-year statute of limitations for injury to real
property. (§ 338, subd. (b).) Relying upon the rule that a cause of action does not accrue
until all elements of the claim are present (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35
Cal.4th 797, 807), appellants argue that their negligence claims against Shell did not
accrue until they learned that earlier contamination of the site had combined with
negligence of defendants other than Shell to contaminate the newly installed layer of top
soil and the condominium structures, and that the earlier contamination was due to
Shell‘s wrongdoing. Noting the trial court‘s finding that some of the plaintiffs were told
of past contamination that had been remediated, and others were not told of any history of
contamination, appellants argue that there were triable issues of fact as to when the
individual plaintiffs and EOA incurred appreciable harm and were put on inquiry notice
of claims against Shell.
―[A] cause of action for damage to real property accrues when the defendant‘s act
causes ‗ ―immediate and permanent injury‖ ‘ to the property or, to put it another way,
when there is ‗[a]ctual and appreciable harm‘ to the property.‖ (Krusi v. S.J. Amoroso
Construction Co. (2000) 81 Cal.App.4th 995, 1005 (Krusi), quoting CAMSI IV v. Hunter
Technology Corp. (1991) 230 Cal.App.3d 1525, 1534 (CAMSI).) Under the discovery
rule, although all conditions for accrual of the cause of action exist, the limitations period
does not begin to run until ― ‗the plaintiff discovers or should have discovered all facts
essential to his cause of action [citations],‘ which is to say ‗when ―plaintiff either (1)
actually discovered his injury and its negligent cause or (2) could have discovered injury
and cause through the exercise of reasonable diligence [italics added].‖ [Citations.]‘
(Leaf v. City of San Mateo (1980) 104 Cal.App.3d 398, 407; cf. Jolly v. Eli Lilly & Co.
(1988) 44 Cal.3d 1103, 1109; Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 99;
Allen v. Sundean (1982) 137 Cal.App.3d 216, 222.) The rule is ‗based on the notion that

24
statutes of limitations are intended to run against those who fail to exercise reasonable
care in the protection and enforcement of their rights; therefore, those statutes should not
be interpreted so as to bar a victim of wrongful conduct from asserting a cause of action
before he could reasonably be expected to discover its existence. [Citations.]‘ (Saliter v.
Pierce Brothers Mortuaries (1978) 81 Cal.App.3d 292, 297.) The rule has been applied
in tort actions of various kinds, including cases which involve nonobvious (or latent)
injuries to real property. (E.g., Allen, at p. 222; Leaf, at pp. 407-409.)‖ (CAMSI, at
p. 1536.)
―In an action involving tortious injury to property, the injury is considered to be to
the property itself rather than to the property owner, and thus the running of the statute of
limitations against a claim bars the owner and all subsequent owners of the property.
(Wilshire Westwood Associates v. Atlantic Richfield Co., supra, 20 Cal.App.4th at
pp. 739-740; CAMSI[, supra,] 230 Cal.App.3d [at pp.] 1534-1535.) In other words, the
statute of limitations does not commence to run anew every time the ownership of the
property changes hands.‖ (Beck Development Co. v. Southern Pacific Transportation Co.
(1996) 44 Cal.App.4th 1160, 1216.) A cause of action for harm to real property ―belongs
to the owner who first discovered, or ought to have discovered, the property damage.‖
(Siegel v. Anderson Homes, Inc. (2004) 118 Cal.App.4th 994, 1009 (Siegel).) That owner
―may choose to deliberately transfer that cause of action to another, but without some
clear manifestation of such an intention, the cause of action is not transferred to a
subsequent owner.‖ (Krusi, supra, 81 Cal.App.4th at p. 1005.) The actual and
constructive knowledge of the prior landowner is imputed to the current landowner for
purposes of the discovery rule. (CAMSI, at p. 1537.)23
Here, undisputed evidence demonstrates that prior landowners were aware of the
contamination of the property. Even putting aside earlier owners of the site, there is no

23
As has been observed, ―[i]f a prior owner knows about defects and fails to sue
the developer or inform the current owner, the current owner is not unduly restricted if
allowed to sue only the prior owner for concealing the defects (inflating the price of the
property).‖ (Valenzuela v. Superior Court (1992) 3 Cal.App.4th 1499, 1503.)

25
question that Signature was aware of the contamination of the parcel upon which the
condominiums were built and of Shell‘s role in causing it by 2002 at the latest, when its
environmental consultant investigated the site and prepared the 2002 corrective action
plan for the Water Board. Signature was required to remediate the contamination before
building on the property and it later entered a settlement with Shell concerning the costs
of that remediation. As the trial court noted, assuming Signature would have had a cause
of action against Shell for the contamination of the property, there is no evidence it
transferred that cause of action to appellants, and certainly not within the three-year
statute of limitations. Appellants do not contend otherwise.
Appellants‘ argue, however, that Signature‘s knowledge of the contamination
before it developed the site is irrelevant because appellants‘ claims are for new and
different damage which occurred later—the contamination of the new topsoil placed after
remediation efforts on the site, and the damage to the condominiums built on the site. ―A
cause of action cannot have accrued before there was someone in a position to actually
assert it‖ (Siegel, supra, 118 Cal.App.4th at p. 1014), and, appellants maintain, Signature
could not have learned of the damage to the new top soil and to the condominiums until
that damage occurred. Appellants emphasize that their claims are for damage to ―their
property,‖ apparently to distinguish the condominiums from the land upon which the
condominiums were built. The relevant question, they maintain, is when appellants
learned or were put on inquiry notice of the damage to their condominiums.
The accrual of a cause of action for property damage in favor of a prior owner
does not prevent a cause of action accruing in favor of a subsequent owner against the
same defendant if the damage suffered by the subsequent owner ―is fundamentally
different from the earlier type.‖ (Krusi, supra, 81 Cal.App.4th at p. 1006.) We offered
an example in Krusi: ―[I]f owner number one has an obviously leaky roof and suffers
damage to its building on account thereof, a cause of action accrues to it against the
defendant or defendants whose deficient design or construction work caused the defect.
But, if that condition goes essentially unremedied over a period of years, owners two and
three of the same building have no such right of action against those defendants, unless

26
such was explicitly (and properly) transferred to them by owner number one. But owners
two and three could well have a cause of action against those same defendants for, e.g.,
damage caused by an earthquake if it could be shown that inadequate seismic safeguards
were designed and constructed into the building. Such is, patently, a new and different
cause of action.‖ (Ibid.)
Appellants see the harm they suffered as fundamentally different from any
Signature could have suffered because the buildings they claim were damaged did not
exist at the time Signature became aware of the contamination of the soil at the site.
What they ignore is the fact that the damage they claim is due to the same contamination
—their claimed injuries are the result of effects of the soil contamination entering their
buildings. They try to avoid this conclusion by characterizing the contamination of the
newly placed topsoil as ―new‖ contamination, since the site had been cleared after the
cleanup efforts that concluded with the placement of this new topsoil and contamination
was found in the new soil only later, after the condominiums were constructed. But there
was no new act by Shell to produce this newly discovered contamination, which was
described by the Board as ―residual‖ contamination. The contamination Signature was
aware of and required to remediate in order to proceed with residential construction on
the site was the same contamination appellants claim is now damaging their
condominiums—allegedly because the contamination was not sufficiently remediated
and, with respect to other defendants but not with respect to Shell, because the design and
construction of the condominiums did not sufficiently protect against intrusion of
contaminated water and/or vapors from the contaminated soil and/or groundwater on the
site. As the trial court concluded, that the damage appellants allege is different in
―degree or extent‖ does not make it a different type of harm from what Signature
suffered. (Krusi, supra, 81 Cal.App.4th at p 1007 [increased leaks causing additional

27
damage after plaintiff purchased property not different type of harm from leaks
experienced by prior owner].)24
Appellants also argue that knowledge of land contamination does not equate to
―knowledge of harm,‖ again trying to make the point that Signature‘s knowledge of the
land contamination, as prior owner, did not mean it had knowledge of the harm that
contamination later did to the buildings. In Alexander v. Exxon Mobil (2013) 219
Cal.App.4th 1236 (Alexander), upon which appellants rely, residents of a housing
complex were told that the land their housing was built upon was contaminated, but that
the contamination did not pose adverse health risks; later, an attorney‘s investigation
suggested the site contamination could be the cause of illnesses from which residents
were suffering. (Id. at pp. 1243, 1246, 1254.) The Alexander court concluded that it
could not determine as a matter of law whether the plaintiffs‘ causes of action for
personal injury accrued at the time residents were told of the land contamination because
more than one reasonable inference could be drawn as to whether notice of the land
contamination should have caused the plaintiffs to suspect it caused a risk to their health.
(Id. at pp. 1255-1256.) In holding that notice of the contamination of the land did not, as

24
Several cases appellants cite as support for their argument that Signature could
not have known of the damage to the new top soil and condominiums until that damage
occurred are inapposite to appellants‘ situation. Oakes v. McCarthy Co. (1968) 267
Cal.App.2d 231, 255, held that property owners‘ claims for property damage due to
underground movement of the soil and fill upon which their lot was built did not accrue
until ―the consequential damage [was] sufficiently appreciable to a reasonable man.‖ The
case involved no issue of a prior owner‘s awareness of the damage. In Siegel, supra, 118
Cal.App.4th at pages 1009 and 1014, the damage sustained by the subsequent owner was
due to a latent defect the prior owner was unaware of and not harmed by. Standard Fire
Ins. Co. v. Spectrum Community Assn. (2006) 141 Cal.App.4th 1117, 1144-1145, rejected
the argument that a homeowners association did not have a cause of action for
construction defects against developers because the property damage occurred before it
owned the property and the prior owner did not assign the cause of action to the
association. (Id. at pp. 1139-1140.) The court rejected this argument because the prior
owner was the developer; the association was the ―first entity capable of maintaining a
legal claim against the developers for the construction defects . . . .‖ (Id. at pp. 1144-
1146.)

28
a matter of law, put the plaintiffs on notice that the exposure to the type of contamination
present might cause them physical injury, specifically distinguished cases involving
claims of damage to property. ―In CAMSI [supra, 230 Cal.App.3d 1525] and Mangini [v.
Aerojet-General Corp. (1991) 230 Cal.App.3d 1125], the plaintiffs alleged damage to
real property based on the presence of environmental contamination. The ‗injury‘ in both
cases was the existence of the pollutants, which devalued their property. The courts, in
turn, ruled that the plaintiffs‘ claims necessarily accrued when they were provided
information indicating that their property might be contaminated with toxic materials. [¶]
In contrast, appellants in this case do not seek redress for damage to real property caused
by the presence of contamination at [the complex]; rather, they seek compensation for
personal injuries that were allegedly caused by exposure to that contamination.
Respondents have identified no portion of the complaint suggesting that, as of 2007,
appellants possessed information that should have caused them to suspect that exposure
to the type of contamination present at [the complex] was capable of causing them
physical injury.‖ (Alexander, at pp. 1258-1259.)
Alexander does not help appellants. Since their claims are for property damage,
not for personal injury, they can be asserted only if they are for property damage of a
different type than what Signature had knowledge of. Signature was aware that the land
was contaminated due to Shell‘s activity on the site. Appellants‘ claims are based on the
same contamination of the land.
Appellants also rely upon Alexander in arguing that the damage to the
condominiums is a new and different injury, triggering a separate limitations period.
Certain plaintiffs in Alexander, after living at the housing complex, moved to an adjacent
community to which it was later discovered contamination from the housing complex site
had migrated. (Alexander, supra, 219 Cal.App.4th at p. 1261.) Declarations indicated
the plaintiffs suffered physical ailments while living both at the complex and at the
adjacent location. (Id. at p. 1262.) The defendants argued the claims were time-barred
because any injuries developed after the plaintiffs moved to the adjacent location could
have been caused by the contamination at the complex. (Ibid.) Alexander rejected this

29
argument, holding that because the pleadings did not indicate when the contamination
migrated from the original site to the adjacent property, the complaint could not be
dismissed on timeliness grounds at the demurrer stage. (Ibid.)
Appellants argue that their case also presents a question of fact as to whether
―migration of the prior contamination‖ caused damage to their ―new and different
property.‖ But, as we have said, the property damage upon which appellants‘ claims are
based is due to the same contamination of the same site as the contamination prior
owners were aware of and attempted to remediate.
Appellant‘s reliance upon Aryeh v. Canon Business Solutions, Inc. (2013) 55
Cal.4th 1185, 1192 (Aryeh), is no more availing. Aryeh applied the theory of ―continuous
accrual,‖ under which ―separate, recurring invasions of the same right can each trigger
their own statute of limitations.‖ (Id. at p. 1198.) The plaintiff, who leased copier
machines, claimed that the defendant periodically imposed charges on monthly invoices
that were unfair and fraudulent under the Unfair Competition Law (Bus. & Prof. Code,
§ 17200 (UCL)). (Aryeh, at pp. 1189-1190.) The first of the alleged instances occurred
outside the four-year limitations period, others occurred within it. (Id. at pp. 1190, 1197.)
Because the defendant‘s duty not to impose unfair charges in monthly bills was ―a
continuing one, susceptible to recurring breaches,‖ each alleged breach triggered a new
statute of limitations; the plaintiff could not recover for breaches preceding the
limitations period but could maintain the suit for alleged charges ―within the four years
preceding suit.‖ (Id. at pp. 1200-1201.)
Aryeh also discussed (but found inapplicable) another theory of accrual, the
―continuing violation doctrine,‖ which permits a plaintiff to recover for injuries resulting
from ―a series of small harms, any one of which may not be actionable on its own.‖
(Aryeh, supra, 55 Cal.4th at p. 1197.) ―Allegations of a pattern of reasonably frequent
and similar acts may, in a given case, justify treating the acts as an indivisible course of
conduct actionable in its entirety, notwithstanding that the conduct occurred partially
outside and partially inside the limitations period.‖ (Id. at p. 1198.)

30
 Appellants do not explain how these theories would apply in the present case
except to state that Shell‘s ―misconduct in failing to remediate the property and negligent
creation of a continuing nuisance, causing spread of the contamination to the new soil
and new construction, is ongoing.‖ The theory appears to be that Shell had an ―ongoing‖
duty to remediate the contamination it caused, so that at least some of this failure to
remediate fell within the statute of limitations. In effect, they alleged an omission
extending continuously over a period of many years; they have not alleged either a
pattern of frequent and similar acts resulting in a series of small harms or a series of
separate, recurring breaches of the same duty that could come within the continuous
accrual or continuing violation doctrine. Appellants describe their negligence claim as
―analogous or perhaps parallel to a continuous nuisance or trespass claim for limitations
purposes.‖ At this juncture, we are not called upon to determine whether appellants have
a viable cause of action for continuing nuisance based on the continuing effect of Shell‘s
pre-1980 contamination of the site and failure to remediate; summary judgment was
granted as to appellants‘ nuisance claims solely on the basis of section 337.15, which we
have held inapplicable. Any claim of negligence causing damage to real property,
however, accrued in favor of prior landowners and cannot be pursued by appellants
now.25

25
Appellants‘ assertion that the trial court erroneously viewed the complaint as
alleging claims of negligent failure to remediate only against defendants other than Shell
misreads the trial court‘s order. As appellants recognize at another point in their opening
brief, the trial court acknowledged that the complaint alleged ―prior owners of the
property contaminated the property and failed to remove the contamination and/or failed
to follow the directives and/or orders of the regional water quality control board.‖ The
theory the court found the complaint did not allege was that appellants‘ negligence claims
against Shell were based on Shell‘s ―failure to adequately perform the duties of a named
Responsible Party (including the duty to provide complete information regarding the
history of the property), pursuant to the directives of the Water Board.‖ The trial court
also commented that this claim based on Shell as Responsible Party ―sound[s] in
negligent misrepresentation,‖ and that appellants had asserted causes of action for
misrepresentation against other parties but not against Shell.

31
 We conclude the trial court did not err in finding the causes of action for
negligence barred by the statute of limitations.

In their briefs on this appeal, appellants describe their complaints as asserting
claims that Shell negligently performed its duties as a Responsible Party and failed to
perform obligations imposed by the Water Board‘s directives, and complain that the trial
court read the complaint too narrowly in refusing to take this view. Appellants do not,
however, directly argue on appeal that their negligence claims can survive the statute of
limitations bar on the basis of a negligence-as-Responsible Party theory (which would
pertain solely to Shell‘s conduct after being named a Responsible Party in 2011). Their
statute of limitations argument is instead consistently based on Shell‘s alleged original
contamination of the site and failure to remediate in general (e.g., ―ongoing, 30-year
failure to remediate‖), and the trial court‘s failure to see their claims as asserting new and
different injury to property—contamination of the new topsoil and fill and of the
condominium structures—from any damage to the land suffered during other owners‘
tenure.
To the extent appellants imply that the trial court erred in finding they did not
allege a theory of negligence based upon Shell‘s conduct as a Responsible Party, we
disagree. As the trial court recognized, the complaint can fairly be read as alleging that
Shell contaminated the site through its operations and failed to remediate that
contamination, but not as providing notice that Shell‘s liability was alleged to stem from
its current conduct in response to the 2011 order. The complaint refers to failure to
comply with directives of the Water Board only in a paragraph of the general allegations
describing the deficiencies in the property which begins by enumerating the alleged
deficiencies, all but the first of which (contamination of the soil and/or groundwater with
harmful petroleum-based chemicals) refer solely to the condominium development with
which Shell had no involvement. The next allegations are that ―[d]efendants, and each of
them, failed to satisfy and/or breached their obligations embodied within the conditions
of approval for the project, the covenants running with the land, directives and/or orders
from the regional water quality control board, their ongoing obligations to monitor the
conditions at the site, failed to clean up the site to the appropriate standards which govern
the development of the project . . . .‖ Read as a whole, these allegations clearly relate to
failures to protect against the contamination of the site in constructing the condominium
development. While it is possible, through painstaking parsing of the allegations, to
identify some that could relate to Shell, to do so takes them out of the context in which
they appear.

32
 DISPOSITION
The trial court properly found the causes of action for negligence barred by the
three-year statute of limitations, but erred in finding those causes of action and the causes
of action for nuisance barred by the 10-year statute of repose.
Accordingly, summary judgment in favor of Shell is affirmed as to the causes of
action for negligence and reversed as to the causes of action for nuisance. The matter is
remanded for proceedings consistent with the views expressed herein.26
The parties shall bear their own costs on appeal.

26
The trial court denied Shell‘s argument that the private nuisance claim was
barred on a theory of consent by the prior owner of the property and its attempt to limit
the damages recoverable on the cause of action for continuing nuisance.

33
 _________________________
Kline, P.J.

We concur:

_________________________
Stewart, J.

_________________________
Miller, J.

The Estuary Owners Association et al. v. Shell Oil Company (A145516)

34
Filed 7/26/17

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

THE ESTUARY OWNERS
ASSOCIATION et. al., A145516
Plaintiffs and Appellants,
(Alameda County Super. Ct.
v. Nos. RG10550407, RG10550416,
SHELL OIL COMPANY, RG12628669)
Defendant and Respondent. ORDER CERTIFYING OPINION
FOR PARTIAL PUBLICATION

BY THE COURT:
The opinion in the above-entitled matter filed on June 28, 2017, was not certified
for publication in the Official Reports. For good cause it now appears that the opinion
should be partially published in the Official Reports and it is so ordered.

Dated: _____________ _________________________
Kline, P.J.

*
Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is
certified for publication with the exception of part II at pages 24 through 32.

1
Trial Court: Alameda County Superior Court

Trial Judge: Hon. George Hernandez, Jr.

Attorneys for Appellant: Chapman & Intrieri, LLP
John W. Chapman
Mark G. Intrieri

Drinker, Biddle & Reath LLP
Alan J. Lazarus
Jaime D. Walter

Attorneys for Respondent: Caldwell & Proctor
Eric S. Pettit
Kelly L. Perigoe

Boies, Schiller, Flexner LLP
Michael R. Leslie

2