Confidential
Settlement – $12,075,000Judge
Court
L.A. Superior Compton
Attorneys
Plaintiff
Defendant
James D. Fraser
(Lewis, Brisbois, Bisgaard & Smith LLP)
Facts
The plaintiffs own over 17 acres of commercial property in Carson. In October 1988, the plaintiffs attempted to sell the property to a real estate development group for $15.8 million. The development group conducted an environmental investigation and discovered that the property was contaminated by three pools of petroleum referred to as the Northern, Central, and Southern Plumes. Defendant oil company No. 1 had an oil refinery across the street from plaintiffs' property. From approximately 1970 to 1986, defendant oil company No. 2's predecessors operated a gasoline service station on the plaintiffs' property. Defendant No. 3 was a retail service station operator who operated the station on plaintiffs' property from 1986 until its closure in 1996. Defendants no. 4, 5 and 6 were oil companies who operated sub-surface petroleum pipelines that ran under or in the immediate vicinity of plaintiffs' prperty.The plaintiffs filed suit against defendant oil companies 1 to 6 on trespass, nuisance, breach of contract and environmental contamination causes of action. Defendant No. 6 settled with plaintiffs in early 1977. Defendant No. 4 was the last party to settle, which occurred in October 1997.
Settlement Discussions
Several mediations were held in 1997 before Judge John K. Trotter of JAMS/Endispute in which defendant oil company No. 1 and defendant oil company No. 2 settled for over $10.5 million in damages which included the cost for cleanup and indemnity. Defendant oil company No. 1 settled for over $5.5 million of that amount.
Damages
The plaintiff claimed $20 million in damages.
Result
In addition to the cash payments, Defendant No. 1 must pay for the cleanup of the Northern and Southern Plumes and comply with all present and future regulatory requirements, execte a broad indemnification for the contamination for the benefit of all present and future owners and lenders of the propert, which indemnity is recorded and shall run with the property. Defendant No. 2, in addition to the cash payments, has also committed to cleanup of the Central Plume and has executed the same indemnity as did Defendant No. 1. With the committment to cleanup and duty to indemnity, the fair market value of plaintiffs' property, which it continues to own under the settlement, is reportedly increased from approximately $2.2 million to a value in excess of $16 million.
Other Information
The settlement was reached approximately three years and 11 months after the case was filed. In the arbitration between defendant oil companies No. 1 and No. 2 and the plaintiffs, Judge Trotter found that a "trier of fact would conclude that the lost sale to [the developer] was occassioned by the discovery of the Northern Plume which added to the concerns already known about the Central Plume."
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