Page 1 –PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT 51907-73250 1388469_1.DOC\RMH/10/19/2015

Christopher L. Reive, OSB # 833058 E-mail: chris.reive@jordanramis.com Peter D. Mohr, OSB # 013556 E-mail: peter.mohr@jordanramis.com JORDAN RAMIS PC Attorneys at Law Two Centerpointe Dr 6

th Flr

Lake Oswego OR 97035 Telephone: (503) 598-7070

Attorneys for Plaintiff Pacific III, LLC

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

PACIFIC III, LLC, an Oregon limited liability company, Plaintiff, v. WELLS FARGO BANK, N.A., Defendant.

Case No. 3:15-cv-01026-MO PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (Request for Oral Argument)

This responds to defendant Wells Fargo Bank, N.A.’s (“defendant”) second motion for

summary judgment. As with its first motion, defendant’s position is not well founded.

Defendant’s arguments raise genuine issues of material fact in dispute, and accordingly,

defendant’s motion should be denied.

In support, plaintiff relies on the Declaration of J. Patrick Lucas in Support of Plaintiff’s

Response in Opposition to Defendant’s Motion for Summary Judgment (“Lucas Dec.”) filed

herewith, the records and files herein, and the Analysis which follows.

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Analysis

1. Summary Judgment Standard

Rule 56(c) of the Federal Rules of Civil Procedure allows summary judgment only when:

[T]he pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the

moving party is entitled to a judgment as a matter of law.

Fed.R.Civ.P. 56. “An issue of fact is ‘genuine’ if the evidence allows a reasonable jury to

resolve the issue either way.” Bennett v. Quark, Inc., 258 F.3d 1220, 1224 (10th Cir. 2001),

overruled on other grounds as explained in Boyer v. Quark, Inc., 258 F.3d 1137, 1140 (10th Cir.

2001). The Court “must draw all justifiable inferences in favor of the nonmoving party,

including questions of credibility and of the weight to be accorded particular evidence.” Masson

v. New Yorker Magazine, Inc., 501 U.S. 496, 520, 111 S.Ct. 2419 (1991). (Emphasis added.)

On summary judgment, the Court evaluates whether a “fair-minded jury [or judge in a bench

trial] could return a verdict for the plaintiff on the evidence presented. United Steelworkers of

America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989), quoting Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 252 (1985). Ultimately, “‘(a)n order granting summary

judgment will only be affirmed if the evidence, read in the light most favorable to the non-

moving party demonstrates the absence of a genuine issue as to any material fact, and the

moving party is entitled to judgment as a matter of law.’” Mangum v. Action Collection Service,

Inc. 575 F.3d 935, 938 (9th Cir. 2009) citing Aguilera v. Baca, 510 F.3d 1161, 1167 (9th Cir.

2007). (Emphasis added.)

2. The “Discovery Rule” applies in CERCLA proceedings.

Defendant’s statute of limitations defense must be considered in light of the “discovery

rule.” In Mangum, supra, the 9th Circuit held: “We have made it clear that, in general, the

discovery rule applies to statute of limitations in federal litigation(.)” Mangum at 940. And lest

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there be any doubt, the discovery rule has been applied to claims arising out of CERCLA. See

New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1125 n. 10 (3rd Cir. 1997) (the

court of appeals recognized the existence of the discovery rule in a claim under CERCLA, but

refused to apply it because the plaintiff was aware of those responsible for its injuries, and

because, by failing to raise the “discovery rule” at the appropriate time, the plaintiff had waived

it).

In Travis, et. al. v. Knappenberger, 204 FRD 652, 655-656 (D. Oregon 2001), the court

held:

Under the discovery rule, a claim does not accrue, and the time

period in which notice must be given does not begin to run, until

the plaintiff discovers, or reasonably should have discovered, (1)

her injury; (2) the cause of the injury; and (3) the identity of the

tortfeasor. Flug v. University of Or., 170 Or. App. 660, 672, 13

P.3d 544, 551 (2000). In Gaston v. Parsons, 318 Or. 247, 864

P.2d 1319 (1994), the court stated:

To discover a particular element of legally

cognizable harm, the plaintiff does not need to

know to certainty that each particular element

exists. The discovery rule is designed to give

plaintiffs a reasonable opportunity to become aware

of their claim. Actual knowledge that each element

is present is not required. On the other hand, a mere

suspicion is insufficient to begin the statute of

limitations to run. We believe that a quantum of

awareness between the two extremes is

contemplated by the statute. Therefore, the statute

of limitations begins to run when the plaintiff

knows or in the exercise of reasonable care should

have known facts which would make a reasonable

person aware of a substantial possibility that each of

the three elements (harm, causation, and tortious

conduct) exists.

Id. at 255–56, 864 P.2d at 1323–34 (citation omitted). (Emphasis

added.)

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In Farmers Insurance Exchange v. First Choice Chiropractic & Rehabilitation, 2014 WL

3591558 *11 (D. Or 2014), the court held:

Under Oregon and federal law, the “discovery rule” operates to toll

the commencement of the statute of limitations applicable to

certain types of claims until: “‘(l) the date of the plaintiff’s actual

discovery of injury; or (2) the date when a person exercising

reasonable care should have discovered the injury, including

learning facts that an inquiry would have disclosed.’” Rice v.

Rabb, 354 Or. 721, 725, 320 P.3d 554, 556–57 (Or. 2014) (citation

omitted); see also Merck & Co. v. Reynolds, 559 U.S. 633, 645

(discussing the “‘discovery rule’”). The discovery rule applies to

UTPA claims, common-law fraud claims, RICO claims, and

ORICO claims.

(Emphasis in the original.)

3. Plaintiff did not discover, and it would not have been reasonable for plaintiff

to have discovered, Wells Fargo’s involvement and potential liability until

2011.

Patrick Lucas has been, and remains to this day, plaintiff Pacific III’s (“Pacific III”) only

manager, member, and employee. Lucas Dec., ¶2. On January 31, 2002, Pacific III entered into

a Prospective Purchaser Agreement (“PPA”) with the Oregon Department of Environmental

Quality (“DEQ”) pertaining to the purchase of contaminated real property located at 1210 N.E.

Oregon Street, Sherwood, Oregon (“Property”). Lucas Dec., ¶3. To obtain the statutory

protections afforded by the PPA, Pacific III undertook to perform certain remedial measures to

clean up the Property including, but not limited to, the removal of contaminated soil,

groundwater, and hide splits. Id. Following completion of the cleanup, Pacific III planned to

develop an industrial subdivision on the Property. Id.1

1 Prior to entering into the PPA, neither Pacific III nor Mr. Lucas had any knowledge about or

any prior experience in cleaning up an environmentally contaminated site. Lucas Dec., ¶4.

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It is undisputed, now, by the parties herein that:

a. Linke Enterprises of Oregon, Inc. (“Linke”), fka Frontier Leather Company, operated a tannery on and around the Property. Lucas Dec., ¶5.

b. It was the various operations of the tannery that contaminated the Property. Id. c. From approximately December 1975 onward, Linke held a controlling share of

stock in Frontier Leather Company. Id. d. Wells Fargo, or its corporate predecessors, acted as trustee for Linke-related

trusts, which trusts allegedly managed operations at the Tannery Site through bank employees. Lucas Dec., ¶7.

Defendant’s affirmative defense raises a genuine issue of material fact as to when Pacific

III (by and through Mr. Lucas) discovered, or should have discovered, Wells Fargo’s

involvement in the management of the Property and the creation of the subject contamination.

As early as 2004, Pacific III was advised by the state of Oregon that ownership of the Property

was in question. Specifically, On January 29, 2004, the Oregon Department of Environmental

Quality (“DEQ”) represented to Mr. Lucas that that there was no clearly established ownership

of the Property, that the Property was abandoned by Linke as the last owner of record, and that

Linke dissolved as a corporation in 2001. Lucas Dec., ¶8, Exhibit 2. Based on this information,

Mr. Lucas (like the DEQ) concluded that Linke had simply ceased to exist for all intents and

purposes. Id. That conclusion is reasonable.

Years later, ownership of the Property continued to remain uncertain. In 2008, Mark

Pugh of DEQ sent an e-mail to Mr. Lucas stating that, as to the Property, “the ownership is still

an issue(,) (t)he ownership needs to be established.” Lucas Dec., ¶9, Exhibit 3. Mr. Lucas

continued to conclude that Linke, the company responsible for causing the contamination in the

first place, simply no longer existed, and that there was no one to answer for the disposition of

nor the historical activity on the Property. Id. That conclusion is reasonable.

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Neither Pacific III, nor Mr. Lucas, became aware of Wells Fargo’s involvement with the

Property as Trustee of a Linke Trust until March of 2011. On or shortly after March 9, 2011,

DEQ issued a public notice seeking public comment on a Proposed Settlement for Former

Frontier Leather and Ken Foster Farm Sites (“DEQ Notice”). Lucas Dec., ¶10, Exhibit 4. The

notice identified as potentially liable parties Linke Enterprises and Don Nelson. Id. No mention

of Wells Fargo was made in the DEQ Notice. Id. Upon receipt of the DEQ Notice, however,

Mr. Lucas contacted his attorneys at the law firm of Slinde Nelson LLC for advice. Lucas Dec.,

¶11. Based upon their investigation into the DEQ Notice, they informed Mr. Lucas of Wells

Fargo’s involvement with Linke. Id.

4. Application of the discovery rule creates a genuine issue of material fact for

which summary judgment must be denied.

Plaintiff did not actually discover facts that indicated Wells Fargo’s involvement as

Trustee of a Linke trust until 2011. That discovery was not made until DEQ, the same agency

that previously and repeatedly advised Mr. Lucas that ownership of the Property remained in

doubt, issued the DEQ Notice identifying Linke Enterprises and Don Nelson. Even then, the

DEQ Notice did not mention Wells Fargo. It was reasonable for plaintiff to conclude, based

upon the information provided to him by the state of Oregon, that there existed no other person

or entity to answer for the contamination on the Property. The DEQ Notice did, however,

stimulate reasonable further inquiry, which plaintiff timely pursued. These events occurred well

within the applicable limitations period at issue here.

Where, as here, the discovery rule is applicable, there is a genuine issue of material fact

which precludes summary judgment. See H.B. Filmes, Ltda. v. CBS, Inc., 98 Fed.Appx. 596,

598 (9th Cir. 2004) (where plaintiff offered sufficient evidence to raise triable issue of fact as to

when it discovered its claim, the trial court erred in granting defendant summary judgment on it

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statute of limitations claim). See also O’Connor v. Boeing North American, Inc., 311 F.3d 1139

(9th Cir 2002) (summary judgment may be defeated where the plaintiffs comes forward with

evidence that they are entitled to the benefit of the discovery rule). Summary judgment should

be denied.

Dated this 19th day of October, 2015.

JORDAN RAMIS PC By: s/ Christopher L. Reive

CHRISTOPHER L. REIVE OSB # 833058 PETER D. MOHR, OSB # 013556 Two Centerpointe Dr 6

th Flr

Lake Oswego OR 97035 Telephone: (503) 598-7070 chris.reive@jordanramis.com peter.mohr@jordanramis.com Attorney(s) for Plaintiff Pacific III, LLC

CERTIFICATE OF SERVICE 51907-73250 1388469_1.DOC\RMH/10/19/2015

CERTIFICATE OF SERVICE

I hereby certify that on the date shown below, I served a true and correct copy of the

foregoing PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT on:

Stephen G. Leatham Heurlin, Potter, Jahn, Leatham, Holtmann & Stoker PO Box 611 Vancouver WA 98666-0611 Facsimile: (360) 750-7548 E-mail: sgl@hpl-law.com

Attorneys for Defendant Wells Fargo Bank, N.A.

by first class mail, postage prepaid.

by hand delivery.

by facsimile transmission.

by facsimile transmission and first class mail, postage prepaid.

by electronic transmission.

X by electronic ECF service and first class mail, postage prepaid.

DATED: October 19, 2015.

s/ Christopher L. Reive Christopher L. Reive, OSB # 833058 Peter D. Mohr, OSB # 013556 Attorneys for Plaintiff Pacific III, LLC