Opinion
Case No. CV 00-5665 AHM (RCx)
July 22, 2002
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY ADJUDICATION I. INTRODUCTION
This action is before the Court on the motion of Communities for a Better Environment ("CBE") for partial summary adjudication. CBE seeks a declaratory judgment that Cenco's permits to operate the refinery equipment that is the subject of this action are void pursuant to Rule 209 of California's State Implementation Plan ("SIP"). In relevant part, Rule 209 provides:
Cenco's objections to CBE's motion for partial summary adjudication on the basis that CBE failed to comply with Local Rule 7-3 are hereby overruled.
A permit shall not be transferable, whether by operation of law or
otherwise, either from one location to another, from one piece of equipment to another, or from one person to another.
When equipment which has been granted a permit is altered, changes location, or no longer will be operated by the permitee, the permit shall become void.
Kuhn Decl. Ex. C.
CBE makes different arguments with respect to the permits governing equipment on the "Walker Property," a parcel of land that Cenco acquired from BC Santa Fe Springs LLC in December 1998, and the remaining permits that govern the equipment on the main refinery site. Defendants' Statement of Uncontroverted Facts ("DSUF") ¶¶ 15-16, 19. With respect to the Walker Property, CBE argues that because Cenco sold that property to a redeveloper who does not plan to use the property to refine oil, the permits Cenco received from SCAQMD to build and operate equipment on the Walker property are void under Rule 209. With respect to the main refinery site, CBE argues that because Cenco will no longer operate the refinery, all of its permits are void under Rule 209. For the reasons stated herein, the Court GRANTS CBE's motion with respect to the Walker property, but DENIES it with respect to the main refinery site.
Cenco Inc. bought the Walker Property from Cenco Refining Company on June 14, 2001. DSUF ¶ 23. On June 14, 2001, Cenco Inc. sold the Walker property to Cenco Electric Company. DSUF ¶ 24.
Defendant's Statement of Uncontroverted Facts is misnumbered by one number, starting at ¶ 25. To avoid confusion, in the references to "DSUF," this order has substituted the paragraph numbers as they were presented in CBE's Statement of Uncontroverted Facts.
II. FACTS
A. Walker Property
Unless otherwise noted, the following facts are undisputed. The Walker Property is a twenty-acre parcel of land that is located to the south and east of the refinery. DSUF ¶ 17. In September 1999, Cenco submitted an application for a conditional use permit ("CUP") in which it proposed to build on the Walker Property gasoline loading racks, a warehouse site, and a shop site for various refinery shops, including an electric shop and pump shop. DSUF ¶ 18; Kuhn Decl. Ex. X; Egner Deel. at 56-57. Also in September 1999, Cenco submitted permit applications to the City and SCAQMD for the Walker Property. DSUF ¶ 21. On April 24, 2000, the City Planning Commission approved a conditional use permit for the Walker Property. DSUF ¶ 26. On November 17, 2000, SCAQMD approved 47 permits for Cenco, including several permits to operate equipment on the Walker Property. DSUF ¶ 28; Egner Decl. at 57 (stating that "various permits to construct [on the Walker property) were obtained from [SCAQMD]."). of these 47 permits, four allowed Cenco to construct and operate four bulk gasoline loading racks, and one allowed Cenco to construct and operate a vapor recovery system ("VRS"). DSUF ¶¶ 30-34. CBE asserts that the permits to build the loading racks and the VRS are for the Walker Property. Pl.'s Mot. at 4. Cenco never directly disputes this fact, but does state in a footnote that "[t]hese permits . . . are listed on the refinery address, 12345 Lakeland Road, not on the Walker Property." Opposition at 4 n. 5; see also DSUF ¶ 224. In support of this assertion, Cenco submits a copy of one permit to operate, which appears to be for Bulk Gasoline Loading Rack #1. Barranca Decl. Ex. A. This permit does list the address of Loading Rack #1 as 12345 Lakeland Road.
Michael Egner is Cenco's Vice President. His declaration is attached to the Sealed Declaration of Scott Kuhn as Exhibit A.
In response, CBE argues that the listing of the address of the loading racks on the permit as 12345 Lakeland Road was a mistake, and that the correct address is 11240 Bloomfield Avenue, the address for the Walker Property. In support of this assertion, CBE submits the following evidence: (1) A June 15, 2000 letter from Cenco to SCAQMD in which Cenco submits its "requested changes" to SCAQMD's permits. One of Cenco's requested changes is that SCAQMD "correct [the] street address" for the new bulk loading racks as they will be located at "11240 Bloomfield Avenue, Santa Fe Springs, adjacent to the refinery." CBE Reply Request for Judicial Notice ("CBE Reply RJN") Ex. 17; (2) SCAQMD stated in a November 2, 2000 letter to Cenco regarding its requested changes to the proposed permits that "[a]lthough the Lakeland address used in the current permit evaluation was provided by CENCO . . . the correct address of Bloomfield Ave. for the new loading racks is included in the permit evaluation addendum." CBE Reply RJN Ex. 18.
The Court takes judicial notice that the address of the Walker Property is 11240 Bloomfield Avenue, Santa Fe Springs, California. This is the address listed on Cenco's cover letter of its CUP application to the City for the Walker Property. CBE Reply RJN Ex. 19.
The Court also notes that the Cenco SCAQMD facility permit identifies the loading rack and VRS permits as being located on Bloomfield Avenue, not Lakeland Road. Kuhn Deel. Ex. N at 566, 567, 568 (Bates numbers) (loading racks), 569 (VRS). Moreover, as discussed above, it is undisputed that Cenco' s CUP application for the Walker Property proposed that Cenco would build gasoline loading racks on that property (the VRS works in conjunction with the loading racks). DSUF ¶ 18. Finally, in its Statement of Undisputed Facts, Cenco states that "[o]riginally, Cenco planned to construct gasoline loading racks and a vapor recovery system on the Walker Property." DSUF ¶ 226.
Instead of admitting that the original listing of the refinery address on the permit was incorrect, Cenco in footnote five in its Opposition suggests that SCAQMD had correctly issued the permit for the refinery property. Cenco even went so far as to submit a copy of this permit in support of its argument. Barranco Decl. Ex. A. These tactics serve to undermine the Court's confidence not only in Cenco's credibility but that of its lawyers.
Given that Cenco never directly disputes that the permits for the loading racks and VRS were for the Walker Property on Bloomfield Avenue, not the main refinery site on Lakeland Road, and given the undisputed evidence (from the horse's mouth, no less) that the correct address for the permits was 11240 Bloomfield Avenue, there is no genuine dispute that the permits for construction and operation of the loading racks and VSR were for the Walker Property.
In March 2002, Cenco entered into an agreement to sell the Walker Property to a redevelopment company called Sares-Regis Group ("Sares-Regis"). DSUF ¶ 48. Sares-Regis is not owned or controlled in any way by any Cenco entity. DSUF ¶ 120. Under the sale agreement, Sares-Regis would redevelop the Walker Property for non-oil refining use. DSUF ¶ 48. While the sale of the Walker property was pending, Sares-Regis applied for and received entitlements from the City of Santa Fe Springs ("City") to build three industrial buildings on the Walker Property. DSUF 44-47.
On March 28, 2002, the City of Santa Fe Springs City Council approved an agreement between the City and Cenco regarding redevelopment of the refinery property. DSUF ¶ 56. This "Agreement Regarding Redevelopment of the Refinery Property" ("Agreement") states that the Walker Property is going to be developed in a manner unrelated to the refinery. DSUF ¶ 59. The Agreement also states that Cenco has abandoned plans to use the Walker Property. DSUF ¶ 100. In approving the development plans for the Walker Property, the City made numerous financial concessions, in the approximate total amount of $1,500,000, in reliance on Cenco's representations that it intends to pursue redevelopment of the Refinery Property. DSUF ¶ 60.
On April 5, 2002, escrow closed on the Walker Property, and it was no longer owned by any Cenco entity. DSUF ¶ 49-52. Also on April 5, the sale of the Walker Property from Cenco to Bloomfield Partners LLC was recorded by Los Angeles County. DSUF ¶ 25. Bloomfield Partners LLC is an entity created by Sares-Regis to acquire and own the Walker Property. DSUF ¶ 63. As of at least April 5, 2002, Cenco no longer has a legal entitlement to operate refinery equipment, including bulk gasoline loading racks and a vapor recovery system, on the Walker Property. DSUF ¶ 53.
Cenco has no intent to build or operate loading racks on the Walker Property. DSUF ¶¶ 111-12. Cenco does not intend to use the CUP it received from the City for the Walker Property to build and operate equipment on that property, and has not applied to the City for permits to re-locate the equipment or facilities that were slated for the Walker Property for another site. DSUF ¶¶ 113, 115. Instead, Cenco has decided to build the loading racks and the VRS on the Refinery site. DSUF ¶ 227. The Abbasfard Declaration (but not the DSUF) states that Cenco decided to build this equipment on the Refinery site after concluding that "the proposed loading rack was too big and unnecessary. The Refinery could operate efficiently with a loading rack that was half the size of the proposed loading rack. This smaller loading rack could be built on the Refinery site, which would allow CENCO to sell the Walker Property." Abbasfard Decl. ¶ 5.
B. The Main Refinery Site
With respect to the main refinery site, located at 12345 Lakeland Road, there are a number of undisputed facts suggesting that Cenco no longer intends to refine oil there. For example:
• On March 28, 2002, the City and Cenco entered the Agreement in which the City made financial concessions in the amount of $1,500,000 based on Cenco's "representations that [it] intends to pursue redevelopment of the Refinery Property, and that such concessions were necessary to facilitate such redevelopment." CBE's Request for Judicial Notice in Support of Motion ("CBE RJN")Ex.F.
• On January 24, 2002, the City Manager, Fred Latham announced during a public City Council meeting that he had been advised by Cenco representatives that Cenco had abandoned its efforts to open an oil refinery in the City of Santa Fe Springs. DSUF ¶ 64.
• The City and Cenco have been working with a developer on the redevelopment of the refinery into a business park. DSUF ¶ 66. Cenco CEO Lowell Morse has recommended to Pat Robertson that Cenco redevelop the refinery facility into something other than a refinery. DSUF ¶ 68.
• The City of Santa Fe Springs published an April 2002 Newsletter that contained a story that stated, "CENCO Refining Company, following lengthy collaborative discussions with the City, has decided against re-opening the former refinery." DSUF ¶ 70.
• Cenco intends to sell the refinery equipment on both the main and Bloomfield refinery sites. DSUF ¶ 72.
• Cenco has solicited proposals from developers to develop all of the Cenco-owned properties in Santa Fe Springs. DSUF ¶ 73.
• The City Manager of the City of Santa Fe Springs has been working with Cenco to formulate plans and related documents for the purpose of redeveloping the refinery into a business park. DSUF ¶ 74.
• Lowell Morse, Cenco's CEO, has informed the City Manager of the City of Santa Fe Springs that it is not Cenco's intent to operate a refinery in Santa Fe Springs. DSUF ¶ 75.
• Cenco has entered into contracts with approximately fifteen insurance carriers whereby those insurance companies were released from their obligations for cash payments. DSUF ¶ 76.
• Cenco has approached all of its insurance carriers to explore cashing out those policies. DSUF ¶ 77.
Lowell Morse is currently President, Chairman of the Board, and Chief Executive Officer of Cenco Refining Company. DSUF ¶ 135.
• Cenco has prepared a plan for dismantling refinery equipment.
• Cenco is actively seeking to sell the land on which the refinery is located. DSUF ¶ 79.
• As of at least April 4, 2002, Cenco was not seeking financing to restart the refinery. DSUF ¶ 80.
• Cenco is not currently seeking financing for a restart. DSUF ¶ 81.
• In order to restart the refinery, Cenco must obtain the requisite financing. DSUF ¶ 82.
• Cenco and the City have discussed redevelopment of the Facility into an industrial park. DSUF ¶ 83.
• Cenco has had discussions with a real estate development firm relating to redevelopment of the Facility into a business park. DSUF ¶ 84.
• Cenco has sold PM, CO, SOx, and NOx pollution credits valued at approximately $500,000. DSUF ¶ 85.
• In order to restart the refinery Cenco would have to repurchase an equivalent amount of PM, CO, SOx, and NOx pollution credits that it has sold. DSUF ¶ 86.
• Cenco is trying to sell its refinery pipelines. DSUF ¶ 87.
• Cenco has sold a sulfur plant it had acquired and planned to operate at the refinery. DSUF ¶ 88.
• Part of Cenco's plan to restart the refinery included use of three sulfurplants. DSUF ¶ 89.
• Cenco currently owns only two sulfur plants. DSUF ¶ 90.
• Cenco received permits to construct for a third sulfur recovery plant from the SCAQMD. DSUF ¶ 91.
• The permits received from SCAQMD were for installation of a specific sulfur recovery plant that Cenco had purchased. DSUF ¶ 92.
• The Sulfur Recovery Plant permit application No. 352861 approved by SCAQMD was for Facility Permit Device ID # D1060, D1062-D1067. DSUF ¶ 93.
• Cenco does not own a third sulfur plant. DSUF ¶ 94.
• Cenco is not investigating purchasing a third sulfur plant. DSUF ¶ 95.
• Cenco has no specific proposal to obtain a third sulfur plant. DSUF ¶ 96.
• SCAQMD permitting regulations require Cenco to operate three sulfur plants in order to operate the refinery. DSUF ¶ 97.
• If Cenco were to restart the refinery, it would have to incorporate a third sulfur plant into that plan. DSUF ¶ 98.
• Cenco sold a proprietary diesel formula developed by Powerine for small refineries to use to manufacture diesel in compliance with California regulations. DSUF ¶ 99.
• CENCO President Lowell Morse told Hector Gonzalez, a reporter for the Whittier Daily News, that Cenco has "dropped its project to renovate and reopen the refinery." DSUF ¶ 106.
• On January 24, 2002 Lowell Morse told oil industry insiders that
• Cenco will not reopen the refinery. DSUF ¶ 107.
• On or about January 25, 2002, Pat Robertson announced that he is dropping his bid to reopen the old Powerine Refinery in Santa Fe Springs. DSUF ¶ 108.
• Lowell Morse told OCTANE WEEK that "life is too short to battle with the environmentalists" and "We are having the entire 100 acres redesigned . . . along the lines of a commercial/industrial/residential multi-use area." DSUF ¶ 109.
• Numerous media news sources reported Cenco had abandoned its plans to open the refinery. DSUF ¶ 110.
• Cenco is actively trying to sell its refinery equipment. DSUF ¶ 123.
• Cenco entered into a contract with Vas Kenyen to sell Cenco Refining Company's equipment. DSUF ¶ 124.
• Lowell W. Morse, Cenco CEO sent a fax to Vas Kenyen that stated, "We are all committed to assisting you sell the equipment. Go get `em." DSUF ¶ 125.
• Cenco's CEO, Lowell Morse has stated [to Vas Kenyen] that he was "hoping to sell everything at the refinery to one buyer." DSUF ¶ 126.
• Vas Kenyen is actively marketing the refinery to potential buyers. DSUF ¶ 127.
• Vas Kenyen has "made it clear" to interested buyers of the refinery that Pat Robertson wants to "sell the refinery `as-is-where as.'" DSUF ¶ 128.
• Mr. Kenyen states that he is "confident" that he can sell the equipment. DSUF ¶ 129.
• Pat Robertson requested Lowell Morse sign a contract with Vas Kenyen to sell the refinery equipment. DSUF ¶ 134.
• In order to operate the refinery 350 employees are needed. DSUF ¶ 166.
• As of April 4, 2002, Cenco Refining Company had only seventeen employees. DSUF ¶ 168.
Cenco acknowledges that it is considering redeveloping the Refinery into an industrial or business park, but argues that it has "actively kept open its option to resume oil refining or sell the refinery to another operator." Opposition at 4. In support of this argument, Cenco points to the following facts (many of which Plaintiff disputes):
• The Agreement between the City and Cenco does state that the City made financial concessions in the amount of $1,500,000 based on Cenco's representation that it intends to redevelop the Refinery Property, but it also states that Cenco "has not abandoned plans with respect to the Refinery Property," and provides that "[i]n the event that Cenco resumes the refining of oil products on any portion of the Refinery Property, Cenco shall pay to City the sum of $1,500,000.00 not later than 30 days after the commencement of such operations." CBE RJN Ex. F at 42-43.
• Cenco has temporarily stopped its efforts to acquire financing because personal investors and/or financial institutions will not invest in a refinery that is subject to a preliminary injunction. DSUF ¶ 212.
• Cenco continues to receive, and consider, offers from brokers regarding financing. DSUF ¶ 213.
• Once the injunction is lifted, Cenco will consider resuming its efforts to get financing. DSUF ¶ 214.
• Cenco was forced to sell or market certain non-essential and replaceable assets to maintain its financial viability because the injunction has left it without any sources of potential revenue. DSUF ¶ 215.
• Genco has approached each potential deal or sale in a manner that ensures it would still have the option to resume crude oil refining or sell the Refinery to another operator. DSUF ¶ 217.
• Mr. Morse did tell Mr. Latham that resuming oil refining was not Cenco's primary objective, but also that Cenco was keeping all of its business options open. DSUF ¶ 230.
• Mr. Morse never told Mr. Latham or anyone else, including newspaper reporters, that Cenco had abandoned its plans to resume the refinery operations. DSUF ¶ 231.
• Cenco has 261 current pollution credits "available to Cenco," and could buy any other necessary credits on the open market. DSUF ¶ 236.
• Cenco has received proposals from developers regarding the redevelopment of the Refinery, but has not decided to redevelop the property, and has not entered into any agreements to do so. DSUF ¶ 237.
• In exploring the prospect of redeveloping the Refinery, Cenco provided the City with a facility closure plan, which was compiled simply to provide the City with information regarding the possible redevelopment of the Refinery and compiled with the purpose to further explore this business option. DSUF ¶ 238.
• Cenco has kept open the possibility that it, or another operator, could refine crude oil in its negotiations to sell some of its pipelines. DSUF ¶ 239.
• In order to keep open the possibility of refining oil, Cenco insists that any sale agreement for the pipelines must include a provision that allows Cenco, or a subsequent purchaser, the right to buyback or lease the pipelines for its operations. DSUF ¶ 242.
• Cenco has recently entered into a preliminary agreement with Sherwood Oil Company for the sale of the Refinery (the "Sherwood Deal"). DSUF ¶ 265.
• While the Sherwood Deal has not yet closed, Sherwood intends to resume refinery operations and acquire Cenco's permits.
CBE objects to paragraph seven, second sentence of Lowell Morse's Declaration regarding the sale of the refinery to Sherwood on the grounds that this statement is hearsay and is not supported by a copy of any alleged agreement (best Evidence rule objection). A copy of the Sherwood Agreement is attached, however, as Exhibit A to the Isakoff Declaration.
With these facts in mind, the Court now turns to CBE's arguments that all of Cenco's permits are void pursuant to Rule 209. With respect to the Walker property, CBE argues that because Cenco sold that property to Sares-Regis, who does not plan to use the property to refine oil, the permits Cenco received from SCAQMD to build and operate equipment on the Walker property are void. With respect to the main refinery site, CBE argues that because Cenco will no longer operate the refinery, all of its permits are void under Rule 209.
III. DISCUSSION
A. Summary Judgment Standard
Federal Rule of Civil Procedure 56(c) provides for summary judgment when "the 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 judgment as a matter of law." The moving party bears the initial burden of demonstrating the absence of a "genuine issue of material fact for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A fact is material if it could affect the outcome of the suit under the governing substantive law. Id. at 248. The burden then shifts to the nonmoving party to establish, beyond the pleadings, that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
"When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transportation Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out the absence of evidence from the non-moving party. The moving party need not disprove the other party's case. See Celotex, 477 U.S. at 325. Thus, "[s]ummary judgment for a defendant is appropriate when the plaintiff `fails to make a showing sufficient to establish the existence of an element essential to [his] case, and on which [he] will bear the burden of proof at trial.'" Cleveland v. Policy Management Sys. Corp., 119 S.Ct. 1597, 1603 (1999) (citing Celotex, 477 U.S. at 322).
When the moving party meets its burden, the "adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). Summary judgment will be entered against the non-moving party if that party does not present such specific facts. Id. Only admissible evidence may be considered in deciding a motion for summary judgment. Id.; Beyene v. Coleman Sec. Serv., Inc., 854 F.2d 1179, 1181 (9th Cir. 1988).
"[I]n ruling on a motion for summary judgment, the nonmoving party's evidence `is to be believed, and all justifiable inferences are to be drawn in [that party's] favor.'" Hunt v. Cromartie, 119 S.Ct. 1545, 155 1552 (1999) (quoting Anderson, 477 U.S. at 255). But the non-moving party must come forward with more than "the mere existence of a scintilla of evidence." Anderson, 477 U.S. at 252. Thus, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted).
B. The Walker Property Permits Are Void Under Rule 209
In relevant part, Rule 209 provides:
A permit shall not be transferable, whether by operation of law or otherwise, either from one location to another, from one piece of equipment to another, or from one person to another.
When equipment which has been granted a permit is altered, changes location, or no longer will be operated by the permitee, the permit shall become void.
Kuhn Decl. Ex. C.
CBE makes the straightforward argument that the permits for the gas loading lacks and the VRS are void under Rule 209 because it is undisputed that SCAQMD granted those permits for equipment to be built and constructed on the Walker Property, and it is undisputed that Cenco has sold the Walker Property and does not intend to build or operate the loading racks or the VRS on that site. It is also undisputed that the new owner of the Walker Property, Sares-Regis, does not intend to build or operate this equipment. Cenco has also stated that it intends to build and construct this equipment on the Refinery site, and that it intends to build a loading rack with half the size of the proposed loading rack. Under the plain language of Rule 209, CBE argues, the permits for the loading racks and the VSR are clearly void.
Perhaps acknowledging the strength of CBE's argument, Cenco does not mount a strong argument in Opposition. Its only argument regarding the Walker Property is in a footnote on page four of its Opposition Brief. There, Cenco argues that: (1) the permits are not void because the address listed on them is the Refinery Address, 12345 Lakeland Road, not the Walker Property; and (2) even if the permits were for the Walker Property address, Cenco "will simply need to file an application to change the location of the permits to construct, rather than undergo a new permit application." Cenco does not cite any rule, statute or case law in support of its second argument.
As to Cenco's first argument, the Court has already concluded that there is no genuine dispute that the correct address for the permits is the Walker Property, not the Refinery, and that Cenco's suggestion to the contrary is entirely misleading. See discussion supra at 3-6 n. 6.
Cenco's second argument — that Cenco simply needs to file an application to change the location of the permits — is contrary to the plain language of Rule 209, and Cenco has not cited anything that supports its position. CBE points out that Rule 209 is the only SIP rule that discusses a change of location for equipment. Moreover, Cenco's argument is contrary to public policy because, as CBE points out, permits are granted only after state and federal environmental review, which is based on a specific location for a specific piece of equipment. Under Cenco's argument, it could move the equipment anywhere it pleased so long as it filed a change-of-address form for its permits.
SCAQMD opposes CBE's motion, but does not make any argument in its brief that refers to the Walker Property permits.
Because it is undisputed that Cenco sold the Walker Property to Sares-Regis and no longer has any legal entitlement or intent to build or operate equipment there, its permits for the gas loading racks and VSR are void under Rule 209. CBE's motion for declaratory relief with respect to these permits is GRANTED.
C. CBE Is Not Entitled To Summary Adjudication for the Remaining Permits that Govern the Equipment at the Main Refinery Site
CBE argues that Cenco's remaining permits for the main Refinery site are void under Rule 209 because Cenco no longer has an intent to refine oil there. CBE is not entitled to summary adjudication as to these permits because — even assuming for the time being that Cenco's intent is dispositive of the issue — there are genuine issues of material fact as to what Cenco intends to do with the Refinery site.
In its Sept. 26, 2001 Order Denying CBE's Motion for Summary Adjudication and Permanent Injunction and Granting CBE's Motion for Preliminary Injunction, this Court never held that whether a permit is void under Rule 209 depends solely on the subjective intent of the permitee. Rather, the Court took into account a number of factors — including statements by the owner or operator regarding intent — before concluding that CBE had "made a strong showing that the refinery was permanently shutdown under Rule 209." Cenco, 179 F. Supp.2d at 1144-48.
Cenco has submitted declarations from three Cenco employees — Mr. Egner, Mr. Isakoff and Mr. Morse — that support Cenco's argument that it does not know what it intends to do with the Refinery site, and has always kept open the possibility of refining oil. See, e.g., Morse Decl. ¶ 3 ("Cenco has always maintained its position that it would explore and keep open all of its business options regarding the Refinery, including operating the refinery, selling the refinery to another operator, selling its assets and any other alternative uses for the Refinery."); IsakoffDecl. ¶ 6 (stating that to maintain its financial viability, Cenco has sold nonessential Refinery assets that it could replace if it decided to refine oil); Egner Decl. ¶ 3 (stating that Cenco is still insured under primary policies, and has only cashed out certain excess policies).
The Agreement between Cenco and the City states that Cenco has not abandoned its plans with respect to the Refinery, and includes a provision for Cenco to pay back the City $1,500,000 if it decides to resume refining oil. Finally, both Mr. Morse and Mr. Isakoff state that Cenco has entered into a deal with Sherwood for the sale of the Refinery, and that Sherwood intends to refine oil after the purchase is complete. Isakoff Decl. ¶ 8; Morse Decl. ¶ 7. This Court has already held that "a mere change in ownership of equipment does not void that equipment's permit under Rule 209." CBE v. Cenco Refining Co., el at., 179 F. Supp.2d 1128, 1137 (C.D. Cal. 2001). Even if Cenco sells the refinery to Sherwood, therefore, the permits are not necessarily void under Rule 209.
Given this evidence, there is clearly a genuine issue as to what Cenco intends to do with the Refinery. Accordingly, CBE's motion for partial summary adjudication for permits not related to the Walker Property is DENIED.
CONCLUSION
For the reasons stated herein, CBE's motion for partial summary adjudication is GRANTED IN PART and DENIED IN PART.
Docket number 230.