- 15 - 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.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011