Port LA >Distribution> >Center> v. United
National Ins. Co.















Filed 8/14/12 Port LA Distribution Center v. United National Ins. Co. CA2/1

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TO BE PUBLISHED IN THE OFFICIAL REPORTS

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California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.







IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA



SECOND APPELLATE DISTRICT



DIVISION ONE




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PORT LA DISTRIBUTION CENTER, L.P. et al., Plaintiffs, Appellants and Respondents, v. UNITED NATIONAL INSURANCE COMPANY, INC., Defendant, Respondent and Appellant.

B230255 (Los Angeles County Super. Ct. No. NC042775)

APPEAL from a judgment of the
Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County. Roy L. Paul,
Judge. Affirmed.

Jones Day, Martin H. Myers, Raymond
H. Sheen, Brian D. McDonald and Matthew J. Silveira for Plaintiffs, Appellants
and Respondents Port LA Distribution Center, L.P. and Port LA Distribution
Center II, L.P.

Gordon & Rees, David C. Capell,
Matthew C. Elstein and Lyndy Chang Stewart for Defendant, Respondent and
Appellant.





_____________________________________



On appeal from the judgment, Port LA Distribution
Center, L.P. and Port LA Distribution Center II, L.P. (collectively, Port LA)
challenges: (1) the order granting
summary adjudication on its complaint in favor of United National Insurance
Company, Inc. (UNIC); (2) the order granting judgment on the pleadings; and (3)
the order denying, as untimely, its motion for production of documents.

Port LA also appeals from these
postjudgment orders: (1) the order
granting UNIC’s motion to strike Port LA’s cost memorandum; and (2) the order
denying Port LA’s motion to strike UNIC’s cost memorandum.

In its appeal from the
judgment, UNIC challenges: (1) the order
granting Port LA summary judgment on UNIC’s cross-complaint; (2) the order
granting Port LA’s motion for summary adjudication on UNIC’s rescission defense
to the complaint; (3) the order denying as moot UNIC’s motion for summary
judgment on its cross-complaint; and (4) the order granting Port LA’s
summary adjudication motion as to UNIC’s duty to defend under the subject
insurance policy.

We have read and considered the
supplemental briefing of the parties on three issues originally not raised or briefed
but requested by the court. The first
issue pertains to an apparent inconsistency in the judgment. The remaining issues concern the appropriate
review procedure for review of the trial court’s discovery ruling and in what
particulars, if any, Port LA sustained prejudice from the lack of a ruling on
the merits of its discovery motion. We
shall address these issues, post.

Based on our review of the
record and applicable law, we affirm both the judgment and the postjudgment
orders in their entirety.

INTRODUCTION


This action concerns the existence or nonexistence of a duty on the part of
UNIC to defend and/or to indemnify and pay cleanup costs for an alleged
pollution condition on real property and presents issues regarding the
interpretation and applicability of the real property pollution insurance
policy (Policy) issued by UNIC to Port LA regarding a certain 55 acre real
propertyhref="#_ftn1" name="_ftnref1"
title="">>[1] known as the Port LA
Distribution Center (Site) in an industrial part of San Pedro in Los
Angeles. The Policy was in effect from
August 3, 1999 to August 3, 2009. The
Site was operated as an oil refinery from about 1923 to 1948, during which time
period the property ownership changed several times. From 1950 to 1995,
the Site was operated as a terminal facility. Between 1997 and 1999, the
facilities used for terminal facility operations were demolished in preparation
for redevelopment of the Site as the San Pedro Business Center.


On February 25, 1985, the Regional Water Quality Control Board (Regional
Board), which opened a case for this Site, issued a “Cleanup and Abatement
Order” (Order No. 85-17),href="#_ftn2"
name="_ftnref2" title="">>[2] which required then Site
tenant Western Fuel Oil Company (WFO), among other operators of petrochemical
facilities, “to conduct a subsurface investigation of their facilities to
detect and assess any groundwater pollution which may be present.” If a condition of pollution were found, WFO
was directed to provide a plan which included “remedial measures and a timetable
to correct that condition.”


In November 1998, Regional Board issued a letter to LandBank, the
representative for Gaffey Street Ventures, LLC (Gaffey Street), then owner of
the Site, regarding requirements related to redevelopment of the Site and the
proposed San Pedro Business Park. Although the Regional Board issued a
“‘no further action’” (NFA) letter with respect to the soil of the Site on
January 13, 2000, Regional Board advised that the groundwater portion of the
case remained open until two remediation goals were achieved, namely:
(1) there was no recoverable free product remaining at the Site; and (2)
both on-Site and off-Site groundwater had been contained and stabilized.


In December 2001, Port LA purchased the Site from Gaffey Street for the purpose
of developing one or more of the properties which were part of the Site.
The Policy, which originally had been issued to Gaffey Street, was transferred
to Port LA.


It is undisputed that the groundwater contamination at the
Site resulted from discharges prior to August 3, 1999 and that “benzene, MTBE,
TBA and TAA” were detected at the Site prior to that date, which was the date
the Policy began. In early 2002, petroleum “‘free product’” was detected
at the Site. Port LA retained third parties, including SCS Engineers
(SCS) and CAPE Environmental Management, Inc. (CAPE), to provide various
services, including investigation regarding groundwater contamination due to
benzene, MTBE, TBA and TAA, among other contaminants. In 2007, for the
first time, the Regional Board required Port LA to investigate fuel oxygenates
in the deep groundwater.

BACKGROUNDhref="#_ftn3" name="_ftnref3" title="">>[3]

The parties acknowledge that UNIC
had been “‘paying on-going costs related to investigating, monitoring and
remediating [groundwater contamination] . . . since 2000’”
and that UNIC paid “‘such on-going costs directly to
CAPE . . . upon receipt of CAPE’s invoices.’”href="#_ftn4" name="_ftnref4" title="">>[4] UNIC paid these costs based on its
understanding that “these invoices reflect costs incurred for groundwater
remediation of free product and monitoring and testing activities which were a
consequence of that remediation, as required pursuant to Order No. 85-17 [
issued in 1985].”

In early 2007, Regional Board
directed Port LA to conduct additional monitoring and investigation of the
quality of the groundwater to determine the presence of the fuel oxygenate
tertiary butyl alcohol (TBA) in the groundwater beneath the free product and
from wells with free product and recommended Port LA implement cleanup measures
to avoid off-Site migration of benzene contamination.

In a letter dated March 30, 2007, Port LA requested
UNIC pay for costs associated with addressing the condition of the groundwater
at the Site and asked UNIC to acknowledge its duty to pay after the Policy
expired. In its August 9, 2007 letter to
UNIC, Port LA renewed its request for payment of CAPE’s March 29, 2007 cost
estimate to comply with Regional Board’s directive regarding this groundwater
monitoring and investigation and the costs associated with Port LA’s retention
of SCS, to “‘assess the effectiveness’” of the current groundwater program and
prepare a report, which report was dated June 19, 2006.href="#_ftn5" name="_ftnref5" title="">>[5] Port LA again requested UNIC acknowledge its
duty under the Policy to pay Port LA’s costs arising from groundwater
contamination of the Site after expiration of the Policy.

By letter dated October 31, 2007, UNIC responded to
this latter letter from Port LA. UNIC
denied that the Policy required it to pay all future costs arising out of
groundwater contamination and asserted the Policy only was required to pay for
“cleanup costs” involving remedial activities resulting from a “‘governmental
mandate’” and which did “not include expenses arising out of testing,
monitoring and/or determining the source and extent of contamination, except as
a consequence of a ‘pollution condition’ to which this policy applies.” UNIC declined to pay CAPE’s March 29, 2007
cost estimate (or work plan), because, in addition to other reasons, the costs
did not qualify as “‘cleanup costs’ as defined in the Policy,” namely, “[t]he
CAPE Workplan does not include any actual remedial activities.” UNIC also declined to pay for costs invoiced
by SCS, which Port LA retained to “‘assess the effectiveness’ of the current
groundwater program and prepare a report,” which SCS did. UNIC asserted “[c]osts incurred to assess the
effectiveness of remediation groundwater activities are not ‘expenses incurred
in the removal, treatment, or remediation’ of groundwater,” and therefore,
“they are not ‘cleanup costs’ within the Policy’s meaning.”

In its November 15, 2007 responsive letter, Port LA
countered that costs incurred to address groundwater contamination are covered
regardless of when the “pollution condition” arose, namely, pre- or post-Policy
inception. Port LA asserted “the Policy
identifies the discharge of petroleum contamination to groundwater as a known
pre-existing ‘pollution condition’ at the [Site]” and that “[t]he Policy covers
both pre-existing and new pollution conditions[,]” because “Coverage A provides
coverage for ‘cleanup costs’ resulting from a ‘pollution condition’ if the
‘pollution condition’ commenced prior to the inception date of the Policy
. . . while “Coverage D provides coverage for ‘cleanup costs’
resulting from a ‘pollution condition’ . . . commenced after . . .
the inception date of the Policy.”

Port LA further asserted that under the Policy,
“cleanup costs” “incurred to test, monitor and determine the source and extent
of contamination are covered ‘cleanup costs’ if they are done as a consequence
of a covered ‘pollution condition’—namely a discharge of petroleum products to
groundwater contamination—as well as costs to test, monitor and determine the
source and extent of such contamination.”

Specifically, Port LA asserted: “TBA and MTBE are potential constituents
associated with releases of petroleum hydrocarbons. As explained above, the Policy identifies the
discharge of petroleum hydrocarbons to soil and groundwater as a known
pre-existing ‘pollution condition’ at the [Site]. [Regional Board] merely asked CAPE to run
additional laboratory tests to determine if two additional constituents, TBA
and MTBE, are present in the known discharge of petroleum at the [Site]. In other words, CAPE was required to get more
data about an already covered ‘pollution condition.’ As such, . . . Coverage A
should apply to CAPE’s work.”

Lastly, Port LA asserted that the “governmental
mandate” requirement of the Policy was satisfied, because since its purchase of
the Site in 2001, Port LA had incurred costs regarding Regional Board’s
requirement that Port LA address groundwater contamination at the Site, and
thus, the costs Port LA incurred to comply were incurred pursuant to a
governmental mandate.

In addition, Port LA asserted UNIC acted unreasonably
in refusing to pay the invoices of CAPE and SCS in question based on its
misrepresentation of the Policy terms; in engaging in undue delay before
processing and paying PORT LA’s claim; and in refusing to respond to Port LA’s
request for confirmation of “its obligation to continue paying covered ‘cleanup
costs’ for the existing groundwater claim following expiration of the Policy,”
which has prejudiced Port LA’s ability “to obtain quotes for supplemental
insurance coverage from markets that would otherwise provide such coverage” and
“to proceed with accurate valuation of the [Site] for potential prospective
purchasers.”

In its responsive letter dated December 11, 2007, UNIC
acknowledged “the costs [Port LA] incurs to actually remediate or correct
groundwater contamination may be covered under the Policy, even if incurred
after the Policy expires, provided all conditions of coverage are met. But, [UNIC] must independently evaluate each
invoice before it can make its coverage determination.” UNIC, however, refused to alter its position
that the CAPE and SCS costs in question were not covered under the Policy.

A. Pertinent Policy Provisions

The Policy
period was from August 3, 1999 to August 3, 2009. “Coverage A” and “Coverage D” of the policy
set forth UNIC “Sites Cleanup Costs Liability.”
Coverage A applied to preexisting pollution conditions while Coverage D
applied to new pollution conditions. In
pertinent part, each coverage provided UNIC would pay on behalf of PORT LA
“those sums . . . ‘cleanup costs’ resulting from a ‘pollution
condition’ to which this insurance applies.”
Payment would be made for “‘cleanup costs’ [that] result from “a
‘governmental mandate’ upon [Port LA] to take ‘corrective action’ provided that
a ‘claim’ for ‘cleanup costs’ is first made upon [Port LA] and reported to
[UNIC] in writing during the ‘policy period’ or Automatic Extended Reporting
Period, if applicable.”href="#_ftn6"
name="_ftnref6" title="">>[6]

Additionally, under Coverage A and Coverage D, UNIC
had “the right and duty to defend such ‘claim’ subject to the Each [sic]
Pollution Incident Limit and the Policy Aggregate Limit. The amount [UNIC] will pay for ‘cleanup
costs’ and all costs to investigate, contest, defend, or appeal all ‘claim[s]’
or ‘suits’ is limited as described in SECTION FIVE—LIMITS OF LIABILITY.”

Section Nine of the Policy set forth these definitions
of relevant terms, in pertinent part, as used in the Policy: “‘Claim(s)’ means a written demand received
by [Port LA] seeking or purporting to hold [Port LA] responsible for . . .
‘cleanup costs’ arising out of a ‘pollution condition.’”

“‘Cleanup costs’ means expenses incurred in the
removal, treatment, or remediation of soil, surface water, groundwater or their
contamination resulting from ‘pollution conditions’ covered by this [P]olicy,
provided that such expenses; a. are the result of ‘governmental
mandate[.]’”
[¶] . . . [¶]
“‘Cleanup costs’> do not include expenses arising out of
testing, monitoring and/or determining the source and extent of contamination,
except as a consequence of a ‘pollution condition’ to which this insurance
applies.” (Italics added.)

“‘Corrective action’ means those remedial operations
and activities performed by a ‘third party’ not affiliated with [Port
LA.]”

“‘Governmental mandate’ means any directive, order,
requirement . . . of . . . any
. . . State . . . of The United States of
America . . . duly acting under the authority of
environmental or related laws.”

“‘Pollutant(s) means any solid, liquid, gaseous or
thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids,
alkalis, chemicals and waste.”
“‘Pollution condition’ means the condition that arises out of a
‘discharge’ of ‘pollutants’ which affects land, surface water, groundwater or
the atmosphere. The entirety of any
‘discharge’ shall be deemed to give rise to one ‘pollution condition.’” “‘Discharge’ means the release, discharge,
dispersal or escape of any ‘pollutant.’”

>B.
Relevant Regional Board Orders and Directives


On February 25, 1985, Regional Board issued Order No. 85-17, which required
WFO, and other petrochemical facilities, “to investigate the groundwater under
and adjacent to (if necessary) their facilities to determine if a condition of
pollution exists.”

Specifically, WFO was ordered to: (1) “conduct an investigation and [S]ite
assessment to detect and characterize any groundwater pollution beneath the
facility,” which “investigation shall be extended to define the edges of the
plume(s)” if “the investigation yields data which reasonably indicates that the
groundwater pollution extends beyond the facility borders;” (2) “at a
minimum[,] identify the following: a. the areas (‘plumes’ and chemical nature
of the pollution in the ground water[;] b. the existence and extent of any free
hydrocarbon pools on the groundwater surface including chemical
characterization of the hydrocarbons[;] c. the extent and chemical nature of
any pollutants (particularly hydrocarbons) that may be absorbed onto the soils
in the unsaturated (vadose) zones or be present as vapors[;] d. . . . provide
data on the subsurface geology and hydraulic properties of the aquifers
underlying the facilities including estimated direction and flow rate of the
groundwater”; [;] (3) “submit a technical report containing a detailed plan for
conducting the above investigation and Site assessment[, which] plan shall be a
timetable for implementation of the plan” and “[a] final, complete report is to
be submitted 30 days later”; and (4) “[i]n
the event a condition of pollution is determined in the above investigation and
Site assessment,” “>include remedial measures and a timetable to
correct that condition ‘in the plan.’”

In its March 1, 2007 letter, Regional Board stated it
was “investigating possible source area(s) for TBA” and noted that the Site “is
located upgradient of ConocoPhillips Wilmington Refinery;” a “groundwater
monitoring and free product recovery program” was being performed at the Site;
and the “groundwater is contaminated with one of [the] fuel oxygenates, TBA, in
this area.” Regional Board recommended
Port LA: (1) monitor fuel
oxygenates though a groundwater sampling event; (2) sample groundwater from
wells with free product (MW-6R, MW-14R, MW-19R) by taking samples from beneath
the free product; (3) obtain product samplings from wells with free product;
(4) investigate human health risk associated with indoor air, because it
expected “more detail[ed] benzene concentration beneath this [S]ite”; and (5)
conduct “further investigation and [identify any] cleanup measure to be
implemented,” because “contaminated groundwater with benzene, 1, 2-DCA, and
other chemicals migrate off[S]ite (MW-9R and MW-10R).”

By email dated December 4, 2007, Regional Board
requested Port LA to investigate and assess the Site for a “condition of
pollution” (Water Code, § 13050, subd. l).
Regional Board noted there was “groundwater contamination with [TBA] all
the way down to the Silverado Aquifer (more than 600 feet deep below mean sea
level) beneath the ConocoPhillips Wilmington Refinery (CPWR) located adjacent
to the [Site]. Due to the TBA
contamination in the deeper aquifer, [Regional Board] requested testing of fuel
oxygenates from the current groundwater monitoring network at the [Site].” Regional Board recommended Port LA conduct “a
[S]ite-wide groundwater investigation to understand the current situation with
fuel oxygenates” in view of “[r]ecent groundwater quality data show[ing] high
concentration of TBA and tertiary-amyl alcohol (TAA) from on-[S]ite monitoring
wells.”

By order dated
March 5, 2009, Regional Board “directed [Port LA] to submit a technical report
by April 20, 2009 for a deep groundwater investigation and conceptual site
model (CSM) based on results of the investigation performed to date for
chemicals of concern at the subject [S]ite” and “must include recommendations
for additional investigations in case the CSM cannot convey all the required
information.”

By letter dated October 21, 2009, Regional Board noted
it had “determined that additional requirements are necessary in order to
complete Site contamination characterization” and directed Port LA to comply
with “the enclosed Order to adequately assess groundwater contamination at and
migrating from the [S]ite.” In pertinent
part, this order required Port LA in delineated items “1.” through “3.” to
submit by December 24, 2009, a technical report (work plan) that provided
“a 3-d illustration” depicting, among other things, “the current groundwater
monitoring network screen intervals”; for installation of “three additional
multi-depth clustered groundwater monitoring wells,” or which “must be
incorporated to the [S]ite’s routine groundwater monitoring program”; and for
performing “cone penetration testing-rapid optical screening tool laser-induced
fluorescence (CPT-ROST LIF) investigation for the submerged light non-aqueous
phase liquids (LNAPL)” In item “4.,”
Port LA was “required to conduct a quarterly groundwater monitoring and
sampling program from all groundwater
monitoring wells at the Site for hydrocarbon compounds and fuel oxygenates
including TBA and TAA” and, “[b]y November 30, 2009,” Port LA was to “submit a
technical report (plan) for the subject [S]ite’s required quarterly groundwater
monitoring program for . . . review and approval.” Item “5.” required Port LA “to submit a
chemical report (plan) to remove the identified contaminants including LNAPL at
the subject [S]ite.”

In this order, Regional Board stated: “Due to historical land use at the [S]ite,
soil and groundwater beneath the [S]ite have been impacted with petroleum
hydrocarbons and fuel oxygenates including TBA and TAA. However, [Port LA has] not yet completed Site
contamination characterization and have not organized Site investigation data
into a conceptual Site model to assess the full extent of the groundwater
contamination. . . . Regional
Board needs the required reports in order to complete the vertical and lateral
delineation of the groundwater contamination plume and properly implement
remedial measures.”

By letter dated February 4, 2010, Regional Board
advised Port LA that based on the discussion on January 20, 2010 of the
technical reports, it was “hereby amending the October 21, 2009 order,” a copy
of which was attached to this letter. In
pertinent part, the amended order revised the date for submission of the
technical report pursuant to items “1.” through “4.” to February 26, 2010.

Deleted was item “5.,” which would have required Port
LA “[b]y March 1, 2010, . . . to submit a technical report
(plan) to remove the identified contaminants including LNAPL at the subject
[S]ite.” In place of this requirement,
the amended order added, as item “6.” the following directive: Port LA was “required to submit a technical
report (plan) to remove recoverable LNAPL and that addresses dissolved phase contaminants
of concern at the subject [S]ite after understanding of LNAPL distribution,
mobility and saturation by ninety days after BlackRock submits its reports with
the results of the additional well installation and LNAPL assessment required
by Provisions [items] 2[.] & 3.”

C. Rulings on the Complaint

1.
Operative Complaint

In its second amended complaint (Complaint),href="#_ftn7" name="_ftnref7" title="">[7] Port LA seeks damages
against UNIC for breach of contract for allegedly failing to carry out its duty
to defend and for refusing to pay cleanup costs for a pollution condition
properly submitted under the Policy (first and second causes of action,
respectively); for tortuous breach of the implied covenant of good faith and
fair dealing (third cause of action); and for declaratory relief
regarding whether UNIC is obligated under Coverage A of the Policy to pay
cleanup costs for the pollution condition and whether UNIC is obligated under
Coverage D of the Policy to pay for cleanup costs for a pollution condition
arising after August 3, 1999 (fourth and fifth causes of action,
respectively). Port LA specifically sought recovery of the costs and
expenses for the “testing, monitoring and investigation
. . . Regional Board required in 2007” that Port LA undertake.


UNIC answered by filing a general denial and asserting fifteen affirmative
defenses, including the defenses that UNIC is entitled to rescind the policy
(fourth affirmative defense); declaratory relief is inappropriate to the extent
Port LA has an adequate remedy at law (seventh affirmative defense); Port LA’s
claims are barred in whole or in part by the equitable doctrines of waiver,
estoppel, laches, or unclean hands (ninth affirmative defense); and Port LA’s
punitive damages claim is barred by its failure to plead or present evidence of
a pattern of egregious practices by UNIC (tenth affirmative defense).

2. Proceedings and Rulings As to Complaint

On
March 8, 2010, the trial court denied Port LA’s motion for summary adjudication
on the issues of UNIC’s duty to defend alleged in the second cause of action
and its duty to indemnify (pay “cleanup costs” alleged in the first cause of
action of the Complaint.href="#_ftn8"
name="_ftnref8" title="">>[8]

On May 13, 2010, the trial court denied Port LA’s
motion to continue the hearing on UNIC’s motion for summary judgment or summary
adjudication on the Complaint. Port LA
sought the continuance based on its “belief that UNIC has withheld more than
800 documents in this litigation, claiming various privileges that, in half the
cases, likely don’t apply” and the pendency of a motion to compel to be heard
by the discovery referee. In denying the
continuance, the court found “Port LA fails to make a sufficient showing that
the facts to be obtained are essential to opposing UNIC’s motion.”

On the same date, the court granted UNIC’s motion for
summary adjudication on the Complaint as to the fifth cause of action
(declaratory relief) regarding whether Coverage D was inapplicable because no
pollution condition had commenced on or after August 3, 1999. The court tentatively ruled in favor of UNIC
on the second cause of action (breach of contract) regarding whether UNIC had
no duty to indemnify Port LA for costs to investigate as cleanup costs, but
reserved its final ruling in view of the issue of whether UNIC owed Port LA a
duty to indemnify as to the costs Port LA incurred for “free product removal”
at the Site in 2009, a new issue raised in Port LA’s opposition to UNIC’s
motion.

The court also denied as moot UNIC’s motion for
summary judgment on its cross-complaint or, alternatively, summary adjudication
of Port LA’s affirmative defenses asserted to the cross-complaint.

On August 9, 2010, on its own motion, the trial court
granted reconsideration of the court’s March 4, 2010 ruling denying the motion
of Port LA for summary adjudication that UNIC had a duty to defend. The court ruled “as a matter of law, on the
undisputed evidence before it, [UNIC] had a duty to defend the claim that arose
with [Regional Board]’s issuance of the February 4, 2010 directive purporting
or seeking to hold Port LA responsible for the cleanup of deep groundwater
contamination at the Site, and which was tendered to [UNIC].” The court, however, did not address whether
the Complaint alleged denial of benefits as to the February 4, 2010 trigger
date.

The court granted Port LA’s motion for summary
adjudication of UNIC’s fourth affirmative defense (rescission) to the
Complaint. The court found the
undisputed evidence revealed no misrepresentations or concealment of the
remediation status of the Site and that UNIC waived any claim for rescission
because “it failed to make further inquiry into any facts it might regard as
material and instead simply issued the Policy.”

The court ruled UNIC was “entitled to summary
adjudication as a matter of law [on] Port LA’s second cause of action for
breach of contract in connection with the duty to indemnify” in view of “Port
LA’s acknowledgment that UNIC has paid the invoices submitted to it for free
product removal at the Site in 2009” and “the undisputed evidence shows that
UNIC did not breach its duty to indemnify Port LA.”

On September 28, 2010, the trial court granted UNIC’s
motion for judgment on the pleadings as to the first (breach of contract; duty
to defend), third (bad faith) and fourth (declaratory relief; pollution condition
and cleanup costs under Coverage A) causes of action of the Complaint.

After noting that on August 9, 2010, the court had
found “UNIC had a duty to defend as to deep groundwater contamination and that
this duty was first triggered by . . . Regional Board’s
order of February 4, 2010,” the court pointed out “for Port LA’s duty to defend
claim to go forward, Port LA must allege (and must be able to allege) denial of
benefits following the [February] 4, 2010 trigger date.”href="#_ftn9" name="_ftnref9" title="">>[9] The court granted judgment on the pleadings
as to the first cause of action (duty to defend), because the Complaint was
filed on September 4, 2009 and “the required denial of benefits is not
presently alleged.” The court found the
third cause of action (bad faith) suffered “from the same defect,” to the
extent it was “premised on the denial of benefits due and owing to Port
LA.” Also, to the extent the bad faith
was based on UNIC’s statements seeking “rescission of the [P]olicy without a
basis in fact to do so, which is not presently alleged in
the . . . [C]omplaint, . . . such statements
cannot form the sole basis for a bad faith claim.” The court found the fourth cause of action
(declaratory relief as to Coverage A) was premature, because “Regional Board
has yet to—and indeed may never—issue a governmental mandate directing Port LA
to remediate deep groundwater contamination at the Site.”

The trial court afforded Port LA the opportunity to
file a third amended complaint no later than October 8, 2010, but the court
also directed UNIC, in the event Port LA elected not to file one, to submit a
proposed judgment of dismissal and notice of entry of judgment no later than
October 15, 2010.

The court denied the motion as to the second (breach
of contract; duty to indemnify) and the fifth causes of action (declaratory
relief; Coverage D inapplicable) of the Complaint as moot in light of the
court’s earlier grant of summary adjudication as to these causes of action in
favor of UNIC.

D. Rulings on Cross-Complaint

1.
Pleadings

UNIC filed a cross-complaint against Port LA,
Gaffey Street’s successor, for rescission of the Policy based on the alleged
misrepresentations—which UNIC allegedly did not discover until June 2009—by
Gaffey Street, which allegedly supplied misleading information to UNIC during
the underwriting process. Gaffey Street allegedly “failed to accurately
describe, among other things, the status of remediation efforts at the Site,
including but not limited to, the time for and cost of completing the remediation
as well as the certainty that an NFA would be issued shortly. The
information provided regarding future anticipated remediation efforts and the
true cost of remediation, among other things, was also inaccurate.” In
other words, “there was uncertainty about when
the Site would be completely remediated and when
an NFA would issue, what needed to be
done to obtain an NFA, how to
effectively remediate, the additional
cost to complete remediation, and who
would pay for it.”


Port LA answered by denying the material allegations of the cross-complaint and
asserting various affirmative defenses, including the statute of limitations
(affirmative defense) and waiver (affirmative defense).


2.
Rulings on Cross-Complaint

On March 8, 2010, after granting
Port LA’s motion for summary adjudication on the rescission cause of action in
UNIC’s cross-complaint based on Port LA’s affirmative defenses of the statute
of limitations bar and waiver, the court granted summary judgment on UNIC’s
cross-complaint in favor of Port LA and against UNIC. The court then placed off calendar as moot
Port LA’s motion for summary adjudication on another affirmative defense.

E. Rulings on Discovery Production Motion

> 1. Production Requests and Responses

On April 2, 2009, UNIC served written
responses, which included objections and assertions of privilege, to Port LA’s
First Set of Requests for Production of Documents.

On April 9, 2009, UNIC produced responsive documents
and provided a privilege-log which identified certain withheld documents and
set forth corresponding privilege assertions.

On May 5, 2009, UNIC served on Port LA a revised
privilege-log which identified certain privileged documents that had been
produced inadvertently.

On May 13, 2009, in writing, UNIC and Port LA agreed
to extend the time for Port LA to file a motion to compel further responses to
June 3, 2009.

On May 28, 2009, the parties extended the time to file
this motion to June 23, 2009.

On April 7, 2010, Port LA filed its href="http://www.fearnotlaw.com/">motion to compel production.

2.
Order Denying Discovery Motion

On August 19, 2010, the trial court overruled Port
LA’s written objections (Code Civ. Proc., § 643)href="#_ftn10" name="_ftnref10" title="">[10] to the proposed order of
the discovery referee, Justice Michael G. Nott, retired, recommending denial of
Port LA’s motion to compel UNIC to produce non-privileged responsive documents
as time-barred, because it had not been brought within the applicable 45 day
time period (§ 2031.310, subd. (c)) and no written extension by the parties had
been filed. Declining to reverse the
discovery referee’s ruling, the court also denied Port LA’s request that the
court direct the discovery referee to
conduct an in camera review of the documents in question or,
alternatively, grant Port LA’s motion to compel.

F. Judgment

On November 15, 2010, the judgment was filed. The court noted that Port LA had not filed an
amended complaint within the time provided.
Judgment was entered in favor of UNIC as to each cause of action in the
Complaint and in favor of Port LA and against UNIC on UNIC’s cross-complaint.


The trial court entered judgment in favor of UNIC on the complaint following
the grant of UNIC’s motion for summary adjudication as to the second cause of
action for breach of contract (cleanup costs) and the fifth cause of action for
declaratory relief as to new pollution conditions coverage and UNIC’s motion
for judgment on the pleadings as to the first cause of action for breach of
contract (duty to defend); the third cause of action for breach of the implied
covenant of good faith and fair dealing; and the fourth cause of action for
declaratory relief as to the pollution condition and cleanup costs and after
Port LA failed to file a timely third amended complaint. The court
entered judgment in favor of Port LA and against UNIC on UNIC’s cross
complaint.href="#_ftn11"
name="_ftnref11" title="">[11]

G. Rulings on Cost Memoranda

On February 10,
2011, the trial court ruled on the cross-motions of Port LA and UNIC to strike
or tax the cost memorandum submitted by the other party. The court granted UNIC’s motion to strike
Port LA’s cost memorandum in its entirety and denied Port LA’s motion to strike
UNIC’s cost memorandum. After granting
Port LA’s motion to tax costs in the amount of $61,934.28, the court awarded
UNIC costs in the amount of $96,919.06.

DISCUSSION

1. Judgment in favor of UNIC on Port LA
Complaint Proper

On appeal from that portion of the judgment in favor
of UNIC on the Complaint, Port LA challenges, as erroneous, the trial court’s
rulings granting UNIC’s motions for summary adjudication and judgment on the
pleadings. Port LA contends the trial
court erred in concluding UNIC owed Port LA no duty to defend or indemnify
under the Policy as alleged in the Complaint and that the Complaint failed
properly to state causes of action for such breaches of duty, for bad faith,
and for declaratory relief as to Coverage A.href="#_ftn12" name="_ftnref12" title="">>[12] There was no error.

Although prevailing on the Complaint, UNIC contends
reversal of the judgment is warranted, because the trial court erroneously
ruled that UNIC’s duty to defend under the Policy was triggered by Regional
Board’s February 4, 2010 order amending its October 21, 2009 order. We disagree.
The challenged ruling does not impact the judgment and therefore no
reversal of the judgment is compelled.

A. Standards of Review

“Any party
may move for summary judgment in any action or proceeding if it is contended
that the action has no merit or that there is no defense to the action or
proceeding. (§ 437c, subd. (a).) Similarly, “[a] party may move for summary
adjudication as to one or more causes of action within an action, one or more
affirmative defenses, . . . or one or more issues of duty, if
that party contends that the cause of action has no merit or that there is no
affirmative defense thereto, . . . or that one
or more defendants either owed or did not owe a duty to the plaintiff or
plaintiffs. A motion for summary
adjudication shall be granted only if it completely disposes of a cause of
action, an affirmative defense, . . . or an issue
of duty. (§ 437c, subd. (f)(1).)

If a
defendant moving for summary adjudication or summary judgment meets his initial
burden of proving the nonexistence of an element of the cause of action, the
existence of an affirmative defense, or the nonexistence of duty, the burden
shifts to the plaintiff to raise an issue of fact for the jury to
determine. (See,
e.g., Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851,
853–854 (Aguilar); see also § 437c,
subd. (p)(2).) All reasonable inferences
must be drawn in favor of the plaintiff, and if a reasonable trier of fact
could find for the plaintiff, the motion must be denied. (Aguilar,
supra, at pp. 856–857.)

The facts
are recounted from the record before the trial court in ruling on the
defendant’s motion for summary adjudication or summary judgment. (See, e.g., Flatt v. Superior Court (1994)
9 Cal.4th 275, 279.) “We review the
trial court’s decision de novo, considering all the evidence set forth in the
moving name="citeas((Cite_as:_24_Cal.4th_61,_*65,_5_P">and opposition papers
except that to which objections were made and sustained. [Citations.]”
(Johnson v. City of Loma Linda
(2000) 24 Cal.4th 61, 65-66.)name=SearchTerm> “The trial court’s stated
reasons for granting summary judgment are not binding on us because we review
its ruling, not its rationale.
[Citations.]” (>Kids’ Universe v. In2Labs (2002) 95
Cal.App.4th 870, 878.)

“A
judgment on the pleadings in favor of the defendant is
appropriate when the complaint fails to allege facts sufficient to state a
cause of action. (Code Civ. Proc.,
§ 438, subd. (c)(3)(B)(ii).) A
motion for judgment on the pleadings
is equivalent to a demurrer and is governed by the same de novo name="SR;2289">standard of review. [Citations.]
All properly pleaded, material facts are deemed
true, but not contentions, deductions, or conclusions of fact or law;
judicially noticeable matters may be considered. [Citations.]”
(Kapsimallis v. Allstate Ins. Co.
(2002) 104 Cal.App.4th 667, 672.)

B. No Duty to Indemnify Port LA For
Investigative Costs

Port LA contends the trial court erred in concluding UNIC owed no duty to
indemnify Port LA for its costs to investigate, including monitor, the deep
groundwater contamination at the Site pursuant to Regional Board’s directives. No error transpired.

We are not persuaded by Port LA’s claim that all its
investigative costs are covered under the Policy, because these costs pertained
to a single “pollution condition” in
that the pollution at the Site was the product of petroleum refinery and
terminal operations at the Site from 1923 to 1995. The plain language of the Policy refutes this
position.

“‘Cleanup costs’ do not include expenses arising out
of testing, monitoring and/or determining the source and extent of contamination,
except as a consequence of a ‘pollution
condition’ to which this insurance applies.’” (Italics added.)

The Policy defines “‘Pollution condition’ [as] the
condition that arises out of a ‘discharge’ of ‘pollutants’ which affects land,
surface water, groundwater or the atmosphere.
The entirety of any ‘discharge’ shall be deemed to give rise to one
‘pollution condition’.” However, the
mere existence of a qualifying pollution condition does not signify coverage
under the Policy.

Coverage A obligates UNIC to “pay on behalf of [Port
LA] those sums . . . for ‘cleanup costs’ resulting from a
[pre-existing] ‘pollution condition’ to which this insurance applies.” “‘Cleanup costs’ means expenses incurred in
the removal, treatment, or remediation of soil, surface water, groundwater or
their contamination resulting from ‘pollution conditions’ covered by this
policy, provided that such expenses . . . are the result of
‘governmental mandate’ . . . , which “means any directive,
order, requirement, court order, or suit
of . . . any . . .
State . . . of the United
States . . . duly acting under the authority of
environmental or related laws.”

The import of these provisions, when read together and
in context, is that the threshold requirement for coverage of “Cleanup costs”
in this situation is the existence of a “governmental mandate” directing Port
LA to “clean up” the “groundwater or [its] contamination.” In this instance, prior to September 28,
2010, or to date, according to the record, no such governmental mandate existed
as to cleanup of the groundwater or its contamination had been issued by
Regional Board.

Additionally, in the absence of the requisite Regional
Board directive or order in this regard, the investigative costs at hand, as a
matter of law, are not subject to indemnification as “a consequence’ of a
“pollution condition.” In contrast with
costs associated with testing, monitoring or determining the effectiveness of
remediation of such a condition, Port LA incurred these costs in order to
identify the nature, character, and determine the extent of the pollutant(s) in
the deep groundwater for the purpose and goal of assessing whether remediation
measures might be necessary and, if so, what such measure(s) might be. As such, Port LA’s investigative costs are
not covered under Coverage A of the Policy.
(See, e.g., Aerojet-General Corp.
v. Transport Indemnity. Co. (1997) 17 Cal.4th 38, 61, fn. 13
[distinguishing “[i]indemnification costs, i.e., expenses to resolve liability”
from “defense costs, i.e., expenses to avoid or at least minimize
liability”].)

C. No Duty to Defend Port LA as to Investigative
Costs

Port LA contends its investigative costs are embraced
under UNIC’s duty to defend under the Policy.
Initially, as discussed above, Regional Board’s directives that Port LA
investigate the deep groundwater to identify and determine the extent of
pollutant contamination does not rise to the level of potential liability which
would implicate UNIC’s duty to defend under the Policy.

We further conclude that Port LA’s investigative costs
do not qualify as costs incurred in conjunction with defense of a “claim”href="#_ftn13" name="_ftnref13" title="">>[13] under the Policy. Coverage A provides UNIC has “the right and
duty to defend such ‘claim’” and to pay “‘all costs to investigate, contest,
defend, or appeal all ‘claim’ or ‘suits’[.]”
As the trial court properly concluded, the term “investigate” refers to
investigation of a claim or litigation, not investigation of matters directed
by Regional Board to investigate.
Accordingly, UNIC had no duty to indemnify Port LA for its investigative
costs in carrying out Regional Board’s directives in this regard.

D. Rulings Regarding February 4, 2010 Order
Inconsequential

UNIC contends reversal of the judgment as to the
Complaint is warranted, because the trial court erroneously found that UNIC’s
duty to defend under the Policy regarding the deep groundwater contaminants was
triggered by Regional Board’s February 4, 2010 order. No reversal of the judgment is
compelled. The trial court’s ruling in
this regard did not in any material way affect the validity of the judgment and
was extraneous to the issues before the court on the Complaint.

On August 9, 2010, the trial court denied Port LA’s
motion for summary adjudication as to UNIC’s duty to defend and duty to
indemnify (first and second causes of action, respectively), rejecting Port
LA’s contentions that UNIC had a duty to defend against Regional Board’s
requests for clean up, specifically investigation and monitoring, and that UNIC
was obligated to indemnify Port LA for its costs incurred in investigating deep
groundwater contamination in that “all costs to investigate, contest, defend,
or appeal” fall within the Policy’s duty to defend umbrella. Acknowledging that the duty to defend a potentially
covered claim is broader than the duty to indemnify, (citing to >Buss v. Superior Court (1997) 16 Cal.4th
35, 48), the trial court concluded that until Regional Board “directs Port LA
to take corrective action, there isn’t even a potential claim.”

On August 19, 2010, Port LA filed a motion for
clarification and/or reconsideration on the grounds the trial court’s ruling
did not address whether any of Regional Board’s directives from 2001 to 2007
had triggered UNIC’s duty to defend and
that, to the extent the trial court intended that the Regional Board’s February
4, 2010 order was the first trigger of UNIC’s duty to defend, the court should
reconsider its ruling. UNIC both opposed
reconsideration and moved for reconsideration on its own behalf.

On September 14, 2010, at the hearing, the trial court
denied both motions for reconsideration but granted its own motion for
clarification. The court clarified that
in its August 9, 2010 order, the court found Regional Board’s directives from
2001 to 2007 did not trigger UNIC’s duty to defend and that its February 4,
2010 order constituted the first trigger of UNIC’s duty to defend.href="#_ftn14" name="_ftnref14" title="">[14]

On September 28, 2010, the trial court granted UNIC’s
motion for judgment on the pleadings as to the first cause of action (duty to
defend) of the Complaint, explaining UNIC’s duty to defend was first triggered
by Regional Board’s February 4, 2010 order, but the Complaint had been filed on
September 4, 2009. The court directed
Port LA to file and serve a third amended complaint in this regard no later
than October 8, 2010.

It is uncontroverted that Port LA did not file an
amended complaint by this deadline and that judgment was entered in favor of
UNIC in material part, because no amended complaint was filed.

In view of the foregoing, the trial court’s ruling
that UNIC’s duty to defend was triggered by Regional Board’s February 4, 2010
order is of no moment and, at best, simply dictum. In the absence of an actionable claim stated
by Port LA in a properly pled complaint, a finding that UNIC had a duty to
defend arising from the February 4, 2010 order goes nowhere.

>2. Judgment in Favor
of Port LA on UNIC Cross-Complaint Proper

UNIC challenges that portion of the judgment in favor of Port LA on its
cross-complaint as error. No error
transpired.

On March 3, 2010, the trial court granted Port LA’s
motion for summary adjudication as to its statute of limitations and waived
affirmative defenses to UNIC’s cross-complaint and, in view of such rulings,
granted summary judgment in favor of Port LA and against UNIC on the
cross-complaint.

The cross-complaint alleged various material
misrepresentations by Gaffey Street in its application for the Policy. These misrepresentations fell into these
categories: During the underwriting
process, Gaffey Street and/or its agent LandBank represented: (1) the status of remediation efforts at the
Site; (2) the cost, timing, and scope of the remediation efforts of CET, the
environmental contractor; and (3) the certainty that shortly Regional Board would
issue a NFA, which would reflect completion of remediation efforts. Not until July 2009, when Port LA produced
the 1999 Underwriting Summary, did UNIC discover the falsity of these
representations and the falsity of certain representations made in the 1998
Underwriting Summary.

UNIC asserts summary judgment in favor of Port LA on
the cross-complaint must be reversed, because the evidence presented revealed
the challenged representations were indeed false. Specifically, this evidence demonstrated “remediation
was not expected to be complete for at least a year” . . . ; CET
had submitted a proposal to Gaffey Street to perform additional work in the
event remediation was not completed until after 1999 and CET planned to
negotiate additional costs with Gaffey Street; and Regional Board imposed
conditions on Site closure for at least two years after soil closure had been
given.

A plain reading of the 1998 Underwriting Summary
refutes UNIC’s claim of ignorance prior to issuance of the Policy as to the
earliest timeframe for complete closure by Regional Board. This Summary expressly provides: “[g]roundwater monitoring will continue
during and for a minimum of two years after termination of the remedial
systems.”

Moreover, the excerpts from the deposition of Thomas
Scruben, submitted by UNIC, established that at the time the Policy was issued,
Scruben was in possession of the December 1998 Underwriting Summary to which
was appended an extra or amended page 9 dated July 15, 1999. UNIC thus was on inquiry notice of the
existence of an underwriting summary more current that the December 1998
Summary.

As for the alleged misrepresentations of the cost,
timing, and scope of the remediation efforts of CET, the environmental
contractor, UNIC has failed to show in what way such alleged misrepresentations
were material and conclusive; to point out evidence in the record in support,
and to make a cogent argument supported by applicable authority for reversing
the judgment in this regard. “This court
is not required to discuss or consider points which are not argued or which are
not supported by citation to authorities or the record. [Citations.]” (MST Farms v.
C.G. 1464 (1988) 204 Cal.App.3d 304, 306; see also, Boyle v. CertainTeed
Corp. (2006) 137 Cal.App.4th 645, 649-650 [challenge to presumption of
correctness requires pertinent “argument and legal authority on each point
raised,” not just “bare assertion of error”]; Sporn v. Home Depot USA, Inc.
(2005) 126 Cal.App.4th 1294, 1303 [waiver where point unsupported “with
reasoned argument and citations to authority”]; Nwosu v. Uba (2004) 122
Cal.App.4th 1229, 1246 [waiver where failure to cite record references].)

3. Denial of UNIC’s Motion for Summary
Adjudication as Moot Proper

UNIC contends the trial court erred in refusing to
rule on its motion for summary judgment on its cross-complaint or,
alternatively for summary adjudication on Port LA’s second, seventh, ninth, and
tenth affirmative defenses to the cross-complaint. In view of our above determination that
judgment in favor of Port LA was properly entered in favor of Port LA, we
conclude the trial court properly denied UNIC’s motion as moot.

>4. Granting of UNIC’s
Motion to Strike Cost Memorandum Not Abuse

Port LA contends the trial court erred in striking its cost memorandum,
because it qualified as a “prevailing party” on the cross-complaint.

“‘The determination of whether there is to be a
prevailing party is to be made “on a practical level” after considering what
each party accomplished via the litigation.’”
(Brawley v. J.C. Interiors, Inc.
(2008) 161 Cal.App.4th 1126, 1137; see §1032, subd. (a)(4).) “[T] he trial court exercises its discretion
to determine the prevailing party, ‘comparing the relief sought with that
obtained, along with the parties’ litigation objectives as disclosed by their
pleadings, briefs, and other such sources.”
(Chinn v. KMR Property Management
(2008) 166 Cal.App.4th 175, 188.) Where,
as here, neither Port LA on its Complaint nor UNIC on its cross-complaint
prevailed by obtaining a monetary award, UNIC, as defendant, is properly
characterized as the “prevailing party.”
(See Gerstein v. Smirl (1945)
70 Cal.App.2d 238, 239-241.)

>5. Port LA’s Challenge
to Discovery Ruling Forfeited

Port LA contends the trial court erred in concluding its motion to compel
production of documents by UNIC was time-barred and that this Court should
direct the trial court to review UNIC’s assertions of privilege on the
merits. We disagree.

A. Factual Background

On April 2, 2009. UNIC served
written responses, which included objections and assertions of privilege, to
Port LA’s First Set of Requests for Production of Documents.

On April 9, 2009, UNIC produced responsive documents
and provided a privilege-log which identified certain withheld documents and
set forth corresponding privilege assertions.

On May 5, 2009, UNIC served on Port LA a revised
privilege-log which identified certain privileged documents that had been
produced inadvertently.

On May 13, 2009, in writing, UNIC and Port LA agreed
to extend the time for Port LA to file a motion to compel further responses to
June 3, 2009.

On May 28, 2009, the parties extended the time to file
this motion to June 23, 2009.

On April 7, 2010, Port LA filed its motion, about ten
months past the deadline for bringing the motion.

On August 19, 2010, the trial court denied Port LA’s
request that its motion be granted or, alternatively, that the discovery
referee be directed to conduct an in camera review of the documents
sought. The court adopted the discovery
referee recommendation that the motion be denied as time-barred, because it had
not been brought within the applicable 45-day deadline (§ 2031.310, subd. (c))
and no written extension had been filed by the parties.

>B.
Applicable Legal Principles

“[I]f a propounding party is not satisfied
with the response served by a responding party, the propounding party name="sp_7047_759">name="citeas((Cite_as:_148_Cal.App.4th_390,_*4">may move the court to
compel further responses. (§§ 2030.300 name=F01092011629223>[interrogatories], 2031.310 [inspection
demands].) The propounding party must
demonstrate that the responses were incomplete, inadequate or evasive, or that
the responding party asserted objections that are either without merit or too
general. (§§ 2030.300, subd.
(a)(1)-(3), 2031.310, subd. (a)(1)-(3).)
The propounding party must bring its motion to compel further responses
within 45 days of the service of
the response[, or supplemental response, or on or before a specific later date
to which the parties have agreed in writing] (§§ 2030.300, subd. (c) §
2031.310, subd. (c)), and must demonstrate that it complied with its obligation
to ‘meet and confer.’ (§§ 2016.040,
2030.300, subd. (b), 2031.310, subd. (b)(2).)
(Also required is a separate statement as specified in Cal. Rules of
Court, rule 3.1020.) In addition, a
party moving to compel further responses to an inspection demand must establish
‘good cause justifying the discovery sought by the inspection demand.’ (§ 2031.310, subd. (b)(1).)” (Sinaiko
Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148
Cal.App.4th 390, 403, fn. omitted.)

C. Standard of Review

“We review discovery orders for an
abuse of discretion. [Citation.] Under this standard, a trial court’s ruling
on a discovery motion ‘will be overturned upon a prerogative writ if there is
no substantial basis for the manner in which name="citeas((Cite_as:_122_Cal.App.4th_1060,_*">trial court discretion was
exercised or if the trial court applied a patently improper standard of
decision.’ [Citation.] Moreover, where the propriety of a discovery
sanction turns on statutory interpretation, we review the issue de novo, as a
question of law. [Citation.]” (>People ex rel. Lockyer v. Superior Court
(2004) 122 Cal.App.4th 1060, 1071.)

D. Untimeliness of Motion Foreclosed Ruling on
Merits

We conclude the trial court
correctly found that Port LA’s motion to compel further responses to its
production of documents request was untimely.
The parties extended the time to file this motion to June 23, 2009. Port LA, however, did not file its motion
until April 7, 2010, almost ten months later, well beyond the 45-day time limit
imposed by section 2031.310, subdivision (c), and all agreed-upon
extensions. Port LA therefore is not
entitled to a ruling on the merits of its discovery motion in the face of this
time-bar.href="#_ftn15" name="_ftnref15"
title="">[15]

For a contrary conclusion, Port LA
relies on section 2031.320, which does not set forth any deadline for filing a href="http://www.mcmillanlaw.com/">motion to compel production. Port LA’s reliance is misplaced on section
2031.20, which, in pertinent part provides:
“If a party filing a response to a demand for
inspection . . . thereafter fails to permit the
inspection . . . in
accordance with that party’s statement of compliance, the demanding party
may move for an order compelling compliance.”
(§ 2031.320, subd. (a), italics added; see also, § 2031.210, subd.
(a)(1) [statement of compliance response]; cf. § 2031.210, subd. (a)(3)
[objection response].)

By its own unambiguous terms,
section 2031.320 applies only when the party responds to the demand for
inspection with a statement of compliance and “thereafter fails to permit the
inspection . . . in accordance with that party’s statement
of compliance.” Section 2031.320,
however, is inapplicable where, as here, the refusal to permit inspection is
based on the assertion of