Hunt & Sons, Inc. - Page 15




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          current double-hull tanks provide much greater protection against           
          leaks, significant risks still exist.  Both the owner of the land           
          and the tenant are liable under California law for the cost of              
          cleanup, even through the tenant whose tanks leak generally is              
          liable under the terms of the lease or under California’s                   
          equitable indemnity laws to reimburse cleanup costs paid by the             
          landlord.  See, e.g., Meghrig v. KFC Western, 516 U.S. 479 (1996)           
          (reciting that owner ordered by California regulatory authorities           
          to clean up prior owner’s petroleum contamination); First San               
          Diego Properties v. Exxon Co., 859 F. Supp. 1313 (S.D. Cal. 1994)           
          (innocent current owner seeking indemnity from prior owner and              
          operator who caused contamination is not liable to prior operator           
          for contribution); Zands v. Nelson, 797 F. Supp. 805 (S.D. Cal.             
          1992) (owner and operator jointly and severally liable to clean             
          up petroleum contamination); Mangini v. Aerojet-Gen. Corp., 227             
          Cal. App. 3d 1248, 1273-1274 (1991) (doctrine of equitable                  
          indemnity under California law).  Because of the substantial cost           
          of cleaning up soil and groundwater contamination, the landlord             
          assumes significant risk when the tenant does not have the                  
          financial wherewithal to respond in damages for the cost of                 
          cleaning up a petroleum leak.                                               
               In addition, property containing underground petroleum                 
          storage tanks may become stigmatized because of concern of                  
          potential buyers about soil and groundwater contamination.                  






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