Case Number: KC066276 Hearing Date: May 13, 2014 Dept: J

Re: USA Waste of California, Inc. v. City of Irwindale, etc., et al. (KC066276 R/T KC066049 (lead case))

(1) DEMURRER TO FIRST AMENDED COMPLAINT; (2) MOTION TO COMPEL FURTHER RESPONSES TO FORM INTERROGATORIES; (3) MOTION TO COMPEL FURTHER RESPONSES TO REQUESTS FOR ADMISSIONS

Moving Parties: (1) Defendant Dispatch Transportation, LLC dba Windrow Earth Transport; (2) and (3) Plaintiff USA Waste of California, Inc.

Respondents: (1) Plaintiff USA Waste of California, Inc.; (2) and (3) Defendant Irwindale Partners, L.P.

This action arises from a dispute involving the filling of the Arrow Pit, a former open pit sand and gravel quarry consisting of approximately 65-acres of undeveloped land in the City of Irwindale. The Complaint was filed on 8/26/13. The operative First Amended Complaint, filed 2/13/14, asserts causes of action for:

1. Declaratory Relief [v. City of Irwindale]
2. Declaratory Relief [v. City of Irwindale]
3. Declaratory Relief [v. Irwindale Partners, L.P.]
4. Breach of Written Agreement [v. City of Irwindale]
5. Intentional Interference with Contractual Relations [v. Defendant Dispatch and Does 1 through 50]
6. Unfair Competition [v. Defendant Dispatch and Does 1 through 50]

On 10/15/13, this case was deemed related to case number KC066049, Irwindale Partners, L.P. v. USA Waste of California, et al., which is the lead case.

The Case Management Conference is set for 6/26/14.

(1) DEMURRER:

Defendant Dispatch Transportation, LLC dba Windrow Earth Transport (“Defendant” or “Dispatch”) demurs to the fifth and sixth causes of action of the First Amended Complaint (“FAC”) filed by Plaintiff USA Waste of California, Inc. (“Plaintiff”) on the grounds that they fail to state facts sufficient to constitute a cause of action and that they are uncertain. Defendant also contends that the fifth and sixth causes of action are time-barred, and the FAC is devoid of facts from which tardy discovery, equitable tolling, or some other exception to the limitations period could be inferred.

FIFTH CAUSE OF ACTION FOR INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS:

The elements of a cause of action for intentional interference with contractual relations are: (1) a valid contract between the plaintiff and a third party; (2) defendant’s knowledge of that contract; (3) defendant’s intentional acts designed to induce disruption of the relationship; (4) actual disruption; and (5) resulting damage. (Reeves v. Hanlon (2004) 33 Cal. 4th 1140, 1148.) Defendant need not have acted with the primary purpose of disrupting the contract. Plaintiff needs only to show that defendant’s knowledge that the interference was certain or substantially certain to occur as a result of his or her actions. (Ibid.)

An action for tortious interference with economic relations is governed by the CCP § 339 (1) 2–year statute of limitations for an “obligation or liability not founded upon an instrument of writing.” (See Knoell v. Petrovich (1999) 76 Cal.App.4th 164, 168—causes of action for interference with contractual relations and interference with prospective business advantage.)

The FAC alleges that the City of Irwindale (“City”) and Plaintiff are parties to written agreements which require, among other things, the City to prioritize the backfilling for the Arrow Pit over all other former quarries in the City and prohibit the City from entering into an agreement with any other backfill operator that prioritizes the filling obligation of such operator ahead of the Arrow Pit (FAC ¶¶ 14, 23, 25, 29, 86, 87); the Standstill Agreement requires Plaintiff, as the current operator of the Arrow Pit, to deposit permissible fill at a cumulative rate of 3.6 million tons during each successive three-year period ending in 2007, 2010, 2013, 2016 and 2019, or until the pit is filled (Id. ¶ 88); and that the City breached the SMARA Transfer Agreement, Standstill Agreement, and Settlement Agreement by: (1) “authorizing Dispatch to receive and place in the Manning Pit inert material that would reasonably be available to USA Waste under the City’s commitment to prioritize the reclamation and backfilling of the Arrow Pit”; (2) authorizing and permitting other privately-operated quarries to operate commercial fill operations in Irwindale; (3) authorizing and permitting other private operators to accept inert debris from third-parties that would otherwise reasonably be available to Plaintiff for its reclamation and backfilling operations at the Arrow Pit; and (4) authorizing competing commercial operations in violation of its obligation to prioritize the backfilling of the Arrow Pit (Id. ¶ 90).

In the fifth cause of action, USA Waste alleges that when Dispatch entered into its License Agreement with the City, Dispatch had actual knowledge of the City’s contractual obligations and promise to prioritize filling of the Arrow Pit (FAC ¶ 98-99); when Dispatch entered into the License Agreement it intended and/or knew that the License Agreement and Dispatch’s operation of the Manning Pit would disrupt and/or interfere with USA Waste’s operations at the Arrow Pit and its performance under the Lease (Id. ¶ 102); the License Agreement was intended to aid the City in avoiding its obligation to prioritize the filling of the Arrow Pit under the Standstill Agreement and Settlement Agreement (Ibid.); Dispatch’s operation of the Manning Pit under the Licensing Agreement has interfered with, disrupted, and made USA Waste’s performance under the Lease more difficult and expense (Id. ¶ 105); that USA Waste has been delayed in completing the backfilling of the Arrow Pit, forcing it to incur costs and expenses from continued operations (Id. ¶ 106); that damages have not been fully calculated because they are ongoing, but that they exceed $25,000. (Id. ¶ 107)

Defendant argues the claim is time-barred because the Licensing Agreement, attached as an Exhibit “F” to the FAC, demonstrates that it was made on or about October 10, 2007 (FAC, Exh. F), but Plaintiff did not commence this action until August 26, 2013. However, Plaintiff alleges that the breach occurred when Dispatch accepted backfill and operated at the Manning Pit (FAC, ¶105), and that its damages have “continued” (Id. ¶106) and are “ongoing.” (Id. ¶106). Thus, the statute of limitations begins to run from the above acts, which are currently occurring. Therefore, the statute of limitations had not expired prior to the commencement of this action.

Defendant further argues that in the FAC, Plaintiff has altered its allegations of breach in paragraph 90A to avoid the preclusive effect of the statute of limitations; and that the new allegations omit averments that the breach occurred when the Licensing Agreement was made, and replace them with allegations that the breach arose when Dispatch began accepting backfill material, which occurred later. Defendant refers to the new allegations as “inconsistencies” and alludes to the sham pleading doctrine.

“Under the sham pleading doctrine, allegations in an original pleading that rendered it vulnerable to demurrer or other attack cannot simply be omitted without explanation…The purpose of the doctrine is to enable the courts to prevent an abuse of process…The doctrine is not intended to prevent honest complainants from correcting erroneous allegations or to prevent the correction of ambiguous facts.” (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751 (citing Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425-426).)

Here, the allegations that Dispatch accepted backfill material is not new (See Original Complaint, ¶ 89), only the allegation that this event caused the breach. The evidentiary facts have not changed, only the legal effect thereof. There is nothing in the FAC that indicates a sham pleading, or that the “omission, substitution, or contradiction of an original allegation carries with it the onus of untruthfulness.” (Avalon Painting Co. v. Alert Lumber Co. (1965) 234 Cal.App.2d 178, 184.)

The demurrer to the fifth cause of action is overruled.

SIXTH CAUSE OF ACTION FOR UNFAIR COMPETITION:

In order to properly assert a claim for Unfair Business Practices, Bus & Prof C. § 17200, the complaint must allege a business practice that is unfair, unlawful or fraudulent, and an authorized remedy. (Bus & Prof C § 17200.) The statute of limitations on claims for unfair competition is four years. (Bus & Prof C § 17208.)

Plaintiff’s sixth cause of action for unfair competition is based on its claim for intentional interference with contractual relations, i.e., Dispatch’s operation of the Manning Pit under the Licensing Agreement has interfered with, disrupted, and made USA Waste’s performance under the Lease more difficult and expense (FAC ¶ 105). As discussed above, the FAC is not time-barred, and thus states a cause of action based upon unfair competition.

Defendant also contends that the sixth cause of action fails because Plaintiff fails to allege how it is an assignee or transferee of the Prioritization Clause. However, the FAC alleges that Plaintiff assumed Irwindale Partners’ obligations under the Reclamation Plan, Standstill Agreement, and other governing documents related to the filling of the Arrow Pit. (FAC ¶ 14.) Accepting the allegations on the face of the pleading as true for purposes of demurrer, Plaintiff does have standing.

Therefore, the demurrer to the sixth cause of action is overruled. Dispatch has 10 days to answer.

(2) MOTION TO COMPEL FURTHER RESPONSES TO FORM INTERROGATORIES:

CCP §2030.220 requires that each response to an interrogatory “shall be as complete and straightforward as the information reasonably available to the responding party permits.” (CCP §2030.220(a)). It also requires that a party “shall make a reasonable and good faith effort to obtain the information” sought by the interrogatory.” (CCP §2030.220(c)).

Form Interrogatory 14.1 and 14.2

Here, Irwindale Partners, L.P. (“Defendant”) was asked to identify statutes, ordinances, or regulations that were violated. Defendant provided a response which did not identify all of the allegedly violated statutes. Instead, it identified one or two, and generally referred to a building code book and a municipal code book, which is insufficient as a response to these interrogatories. A further response is required.

Form Interrogatory 15.1

This interrogatory asked Defendant to identify each denial of a material allegation and each affirmative defense. Defendant objected on numerous grounds, including that it was burdensome and calls for a legal conclusion; is not full and complete in and of itself, and requires reference to other writings; and violates attorney-client and attorney work-product privileges.

Burdensome:

“[S]ome burden is inherent in all demands for discovery. The objection of burden is valid only when that burden is demonstrated to result in injustice.” (West Pico Furniture Co. v. Sup. Ct. (1961) 56 Cal.2d 407, 418.) Here, the form interrogatory does not call for a legal conclusion, but it requires Defendant to provide specific references to facts it relied upon in formulating its defenses, and Defendant is expected to make a reasonable and good faith effort to obtain the information sought by the interrogatory. Further, “[o]bjecting parties must file evidence detailing the amount of work involved, in order to support objections based upon burden and oppression.” (West Pico Furniture Co. v. Sup. Ct. (1961) 56 Cal.2d 407, 417; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2013) ¶8:1097.) Defendant has not provided such evidence. Thus, the objection is overruled and a further response is required.

Full and Complete:

The requirement that an interrogatory be full and complete refers to the drafting of special interrogatories. A special interrogatory must be full and complete and not make references to other documents, where the effect is to undermine the rule of a 35-interrogatory limit. (Clement v. Alegre (2009) 177 Cal.App.4th 1277, 1290; Catanese v. Sup. Ct. (1996) 46 Cal.App.4th 1159, 1164 (improper to request reference to deposition excerpts).) In this case, the discovery is a form interrogatory, not a special interrogatory, so that objection not proper. Further, Defendant has not made a showing that Plaintiff’s main purpose is to undermine applicable discovery limitations. The objection is overruled and a further response is required.

Attorney-Client Privilege:

The attorney-client privilege is contained in Evidence Code section 950 et seq., and in general allows the client “to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer . . . .” Here, Defendant’s counsel asserts this privilege on behalf of his client, Irwindale Partners, L.P. It is not apparent that this form interrogatory asks for the disclosure of any of Irwindale Partners’ communications of a confidential nature. The facts that Defendant intends to rely upon to defend the case have not been shown to be confidential. The objecting party has the burden to file evidence of the preliminary facts establishing a privilege exists. (HLC Properties, Limited v. Sup. Ct. (2005) 35 Cal. 4th 54, 59; Weil & Brown, Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 2013) ¶8:192.) In this instance, there is no declaration or other evidence filed with the opposition brief to support the privilege. The objection is overruled.

Attorney Work-Product Privilege:

The attorney work product doctrine is codified in section 2018 of the Code of Civil Procedure. “The work product rule in California creates for the attorney a qualified privilege against discovery of general work product and an absolute privilege against disclosure of writings containing the attorney’s impressions, conclusions, opinions or legal theories.” (BP Alaska, supra, 199 Cal. App. 3d at p. 1250.) Here, it is not apparent that this form interrogatory asks for the disclosure of any of counsel’s impressions, conclusions, opinions or legal theories. The form interrogatory asks for facts, not impressions, conclusions, opinions, or legal theories. Further, no evidence has been presented to support the privilege. Thus, the objection is overruled and a further response is required.

Form Interrogatory 17.1

This interrogatory asked Defendant to provide more information about each response to requests for admissions (“RFA”) that was not an unqualified admission. It asks for the number of the RFA, the supporting facts, the contact information of persons who have knowledge, and to identify relevant documents and the contact information of the persons that have them. Plaintiff claims that Defendant’s responses were unsatisfactory to 17.1 as to RFAs 3, 5, 7-22, 24, 28, and 29. Form Interrogatory 17.1 asks for the identity of persons with knowledge, and does not call for a compilation or abstract. Further, Defendant fails to identify the specific persons with knowledge of the specific facts, and includes reference to all exhibits in related pleadings, which is contrary to the requirement that each response to an interrogatory “shall be as complete and straightforward as the information reasonably available to the responding party permits.” (CCP §2030.220(a)). Finally, the responses repeat the same list of persons for 17.1(c) for every RFA, contrary to §2030.220(a). The objections are overruled and a further response is required.

For all of the foregoing reasons, the motion is granted. Defendant Irwindale Partners, L.P. is ordered to provide further responses to the foregoing form interrogatories within 20 days.

(3) MOTION TO COMPEL FURTHER RESPONSES TO REQUESTS FOR ADMISSIONS:

CCP §2033.220 states, “(a) Each answer in a response to requests for admission shall be as complete and straightforward as the information reasonably available to the responding party permits.”

RFA 1 and 2

These requests ask Defendant to admit that Plaintiff has vested rights in the Reclamation Plan and the Standstill Agreement. In addition to making several of the above objections, which are invalid, Defendant generally responded. There was no “admit” or “deny” to 1 or 2, but Defendant stated that a reasonable inquiry concerning the matter in the particular request has been made, and that the information known or readily obtainable is insufficient to enable that party to admit the matter. Plaintiff moves to compel a further response. However, Defendant’s response is proper under CCP §2033.220(c), and uses the same language found in that section. Thus, no further response is required.

RFA 8

This request asks Defendant to admit that “the Reclamation Plan requires the Arrow Pit operator to place acceptable backfill material in accordance with generally accepted practices for grading in Southern California.” Defendant made the usual objections, and then stated, “Responding Party admits that generally accepted practices for grading in Southern California, among other requirements, as set forth in, including but not limited to, the applicable statutes, regulations and ordinances, apply to USA Waste’s backfilling operations at the Arrow Pit[.] Except as expressly admitted, Defendant denies this Request.” Plaintiff contends that a further response is required because the response may not be qualified. However, CCP 2033.220(b)(1) gives a responding party the option to “[a]dmit so much of the matter involved in the request as is true, either as expressed in the request itself or as reasonably and clearly qualified by the responding party.” Defendant has sufficiently qualified its response. Thus, no further response is required.

RFAs 4, 6, 23, 26, 27, 31, and 32

Defendant claims that further responses have been provided, so the motion as to these is moot.

SANCTIONS:

Plaintiff requests sanctions of $1,500.00 for each of the two discovery motions. The court grants discovery sanctions in the amount of $1,500.00, payable by Defendant Irwindale Partners, L.P. to counsel for Plaintiff within 20 days as to the Motion to Compel Further Responses to Form Interrogatories. Sanctions are denied with regard to the Motion to Compel Further Responses to Requests for Admissions.