Justia Landlord - Tenant Opinion Summaries

Under Water Code section 13304, a prior owner of property may be required to participate in the cleanup of wastes discharged from its property that resulted in groundwater contamination if that person “caused or permitted” the discharge. The San Francisco Regional Board named UATC in a cleanup order addressing waste discharges from dry cleaning operations at a shopping center owned by UATC in the 1960s and 1970s. The court of appeal reversed, in favor of the Board. The knowledge component of the statutory element of “permitted” focuses on the landlord’s awareness of a risk of discharge: a prior owner may be named in a section 13304 cleanup order upon a showing the owner knew or should have known that a lessee’s activity created a reasonable possibility of a discharge of wastes into waters of the state that could create or threaten to create a condition of pollution or nuisance. The court rejected UATC’s argument that its liability was discharged in a 2000 bankruptcy reorganization proceeding. Even assuming the Regional Board’s entitlement to a cleanup order was a claim within the meaning of bankruptcy law, it was not discharged in UATC’s bankruptcy proceeding because it did not arise before confirmation of reorganization. View "United Artists Theater Circuit, Inc. v. Regional Water Quality Control Board, San Francisco Region" on Justia Law

Nearly 20 years after defendants built, sold, and leased back a Rockport Indiana coal-burning power plant, they committed, in a consent decree resolving lawsuits involving alleged Clean Air Act violations at their other power plants, to either make over a billion dollars of emission control improvements to the plant, or shut it down. The sale and leaseback arrangement was a means of financing construction. Defendants then obtained a modification to the consent decree providing that these improvements need not be made until after their lease expired, pushing their commitments to improve the air quality of the plant’s emissions to the plaintiff, the investors who had financed construction and who would own the plant after the 33-year lease term. The district court held this encumbrance did not violate the parties’ contracts governing the sale and leaseback, and that plaintiff’s breach of contract claims precluded it from maintaining an alternative cause of action for breach of the covenant of good faith and fair dealing. The Sixth Circuit reversed, holding that a Permitted Lien exception in the lease unambiguously supports the plaintiff’s position and that the defendants’ actions “materially adversely affected’ plaintiff’s interests. View "Wilmington Trust Co. v. AEP Generating Co." on Justia Law

David Caron purchased a majority membership in Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle, LLC without having obtained the written consent of Goodhall's, Inc. (Goodhall's), in violation of Goodhall's lease with Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle. The lease idenitified Goodhall's as the landlord and Goodhall's Chrysler-Plymouth-Dodge-Jeep-Eagle as the tenant. After a dispute arose concerning the party responsible for remediating certain environmental conditions on the property, Plaintiffs, David Caron and David Caron Chrysler Motors, filed suit against Defendants, Goodhall's and others, claiming that Defendants had violated provisions of its lease regarding Goodhall's responsibility for preexisting environmental conditions and Goodhall's warranty of fitness and habitability. The trial court rendered judgment in favor of Defendants, concluding that no contract existed between the parties to this action because the assignment of the majority interest in the tenant to Caron was invalid. The appellate court affirmed. The Supreme Court reversed, holding (1) the appellate court improperly failed to consider Plaintiffs' claim that the trial court had improperly concluded that no contract existed between David Caron Chrysler Motors and Goodhall's; and (2) the trial court was incorrect in finding that, because Goodhall's did not consent to the assignment, there was no contract between David Caron Chrysler Motors and Goodhall's. View "David Caron Chrysler Motors, LLC v. Goodhall's, Inc." on Justia Law