Tuesday, May 10, 2011
C.A. Declines to Revive Suit Over Cleanup of Carson Landfill
By SHERRI M. OKAMOTO, Staff Writer
This district’s Court of Appeal yesterday declined to revive a lawsuit by the county of Los Angeles seeking contribution and indemnification from a disposal company for the cleanup of a landfill in Carson.
In an unpublished opinion, Div. Five concluded Athens Disposal Company Inc. was not a successor in interest to the long-defunct waste hauler which had used the Cal Compact Landfill.
The principals of Athens Disposal, brothers Jack and Ed Arakelian, had entered into a contract as joint venturers, to haul municipal waste to the landfill in 1957.
When the contract was not renewed, the brothers, together with Jack Arakelian’s son, formed a partnership which entered into a three-party joint venture with S.V. Disposal—an extant waste hauling business with small routes and freelance drivers in the Alhambra area—and Michael Harabedian to bid on and service a waste hauling contract in Alhambra. This new joint venture was awarded a contract in 1960.
Two years later, the Arakelians and a fourth family member bought out S.V. Disposal and Harabedian. Shortly thereafter, S.V. Disposal’s articles of incorporation were amended to change its name to “Athens Disposal Company.”
In 2003, after the county settled claims brought by a number of oil companies which had contributed funds towards the cleanup of the Cal Compact Landfill, the county attempted to recoup a portion of that settlement payout by filing its complaint for contribution and/or indemnification against Athens Disposal and others.
The county argued that the haulers with whom the county contracted to transport municipal waste shared liability for the amounts paid in settlement of the claims brought by the oil companies. The county sought to hold Athens Disposal liable for the obligations of Jack and Ed Arakelian under the 1957 contract, contending that Athens Disposal and the original joint venture “were actually the same company.”
In the alternative, the county alleged Athens Disposal was a mere continuation of, or the result of a merger with, the brothers’ venture.
Los Angeles Peter D. Lichtman found no triable issues of fact regarding the county’s claims and granted summary judgment in favor of Athens. Justice Orville A. Armstrong agreed.
In his decision for the appellate court, Armstrong noted the original join venture “was an unincorporated business association consisting of two brothers as equal partners who hauled trash in the South Bay under contract” with one garbage disposal district at the same time S.V. Disposal was operating as “a California corporation controlled by its board of directors (Michael Harabedian, Sam Vartanian and Leroy Pulliam) which hauled trash in the San Gabriel Valley.”
“The County’s argument that these two business enterprises are ‘the same’ thus lacks merit,” Armstrong said.
He also brushed aside the county’s successor-in-interest claims, noting “the undisputed evidence establishes that the Arakelian brothers did not continue their joint venture after the expiration of the  Contract, but found a new business opportunity” which included additional individual and corporate members who provided new capital, operated in a different geographic location and serviced new customers.
“This fact precludes a finding of successor liability,” he said.
Justices Richard M. Mosk and Sandy R. Kriegler joined Armstrong in his decision.
The county was represented by William D. Brown, Scott E. Patterson, and Jeffrey T. Orrell of Brown & Winters. Patrick W. Dennis, Thomas A. Manakides, and Matthew Wickersham of Gibson, Dunn & Crutcher were counsel for Athens.
The case is County of Los Angeles v. Athens Disposal Company, Inc., B219576.
Copyright 2011, Metropolitan News Company