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Jaasma v. Shell Oil Co.

Citation: 35 ELR 20137
No. No. 04-2095, (3d Cir., 06/28/2005)

The court reversed a district court's summary judgment order dismissing a property owner's claims that an oil company breached its obligations under a lease agreement to operate a gasoline station and that the owner had suffered cognizable damages as a result of that breach. A week before the end of the lease, fuel residue was discovered on soil adjacent to the station's underground storage tank, which led to an investigation by the state environmental agency. Although soil samples indicated that the levels of hazardous compounds were below regulatory standards, it took over two years of sampling to prove the property's safety to the satisfaction of the state agency. The property owner filed suit against the oil company for breaching the lease and sought damages for loss of use during the pendency of the investigation. The district court erroneously granted summary judgment in favor of the oil company. There is a legally sufficient basis for a jury to find that the company breached the lease agreement. Further, New Jersey law recognizes loss of use as a measure of damages for temporary harm to property interests as a result of the uncertainty surrounding a property's environmental status that impairs its marketability. In addition, the district court abused its discretion by excluding testimony of the property owner's expert witness.