SDC/Pullman Partners v. Tolo Inc.

I

This case centers on a toxic substance clause in a lease of land to an aerospace manufacturer. The former lessee, defendant Tolo Incorporated, manufactured fusion reactors, particle accelerator parts and radar antennas, among other things. Tolo occupied the property, which is just off the Costa Mesa Freeway, from the late 1960’s to the mid-1990’s. It began leasing the land from plaintiff SDC/Pullman Partners in 1985 after a sale-leaseback deal. The lease was renewed in July 1989. It is that lease which contains the clause in question.

Quite remarkably—for an aerospace manufacturer—the land in question is not the subject of any cleanup actions on the part of any government entities, local, state or federal. Unlike some of Tolo’s neighbors, the property has suffered no groundwater pollution; levels of toxic and hazardous substances in the soil have not been high enough to trigger any cleanup order. Perhaps the most remarkable fact to emerge from the trial exhibits is that in one sampling of soil from five feet beneath a fenced drum storage area near one of the buildings, some tetrachloroethene (PCE) was indeed found—but at a level, 5 parts per billion, which is only…