Family Awarded $10 Million in Pollution Suit

A San Luis Obispo jury awarded $10 million in punitive damages Wednesday to a family that claimed Unocal Corp., the oil and natural gas producer, should pay for a gooey leak under their property.

The judge in the trial is still considering whether the company committed unfair business practices. Earlier in the 8-week trial, the jury ordered the company to pay the Holdgrafer family $2.6 million in compensatory damages because the leak could not be unearthed.

The family cheered the jury’s decision, which probably will echo around the Central Coast, said Steve Crandall, the Holdgrafers’ lawyer.

“We have a web up here of abandoned oil pipelines from Unocal along the Central Coast,” he said. “Next time a business owner or a property owner strikes oil -- and this is not in the good sense -- Unocal will treat them fairly, treat them decently.”

Unocal’s lawyer, Jim Buttery, said it is too early to say whether the company will appeal.

“We’re disappointed that any punitive damages were awarded,” Buttery said. “We’re pleased that the jury apparently agreed with us that the contaminated soil should not be excavated because to do that would create more pollution and more health exposures.”

The Tank Farm Road area leak, 10 to 30 feet below ground, occurred before 1952 and does not endanger any water supplies, Buttery said.

He added that Unocal has already helped the family in the past with loan guarantees and cash advances.

“Unocal thought it was being a good neighbor to the Holdgrafers by eliminating any actual damages that they might suffer,” Buttery said. “Yet the lawsuit probably resulted from Unocal’s position not to pay

The family bought the property in the mid-1970s without knowing about the leak and built rental storage and staging space for wholesale companies, the Holdgrafers’ lawyer said. The family learned that a blob of crude oil, diesel, gasoline and gas oil was under its property in 1988, just after the Coca-Cola Co. discovered contamination in the area while reviewing properties for possible purchase.

Unocal told the Holdgrafers about the leak, but did not clean up the mess, Crandall said. The family had trouble paying its loans because of the contamination, he said. Unocal eventually bought the deeds in 1996 and then, Crandall said, offered no more support.

Garry Holdgrafer, Evelyn Holdgrafer, Garry Holdgrafer II, Cindy Okerson and their businesses filed suit against Unocal in 2001.

In the past five years, Unocal has paid out more than $100 million for oil leaks in the Central Coast area, most notably in Avila Beach and Guadalupe Dunes.