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International Clinical Labs., Inc. v. Stevens

Citation: 19 ELR 21084
No. No. CV 87-3472, 710 F. Supp. 466/29 ERC 1519/(E.D.N.Y., 04/12/1989) Denial of partial summary judgment

The court holds that a land purchaser's action to recover hazardous waste cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) from the seller and the seller's former tenant is not barred by an "as is" clause in the purchase agreement, CERCLA's third-party defense, or the principle of equitable estoppel. The court first holds that the "as is" clause is the property sales contract does not preclude an action by the purchaser against the seller to recover hazardous waste cleanup costs under CERCLA. Under New York law, "as is" clauses bar only actions based on breach of warranty, not claims based on CERCLA. The court next holds that CERCLA's third-party defense is not available to the seller, whose tenant released the hazardous waste, since a lease is a contractual agreement for the purposes of CERCLA § 107(b)(3). The court also holds that the principle of equitable estoppel does not completely bar the purchaser's CERCLA claim, even though the property was purchased "as is" after inspection by an engineer. The court next holds that genuine issues of material fact exist as to the nature and extent of the tenant's liability and thus the partial summary judgment sought by the purchaser seeking recovery of response costs from the tenant is inappropriate at this time. The court rules that a governmental cleanup order is not a prerequisite to recovery in a private CERCLA cost recovery action. The court declines to rule at this time on whether the purchaser's investigatory and closure costs are recoverable under CERCLA, although it notes that these costs appear to fit within the definitions in CERCLA §§ 101 (23) and (24).

Counsel for Plaintiff
David D. Patterson
Breed, Abbot & Morgan
153 E. 53d St., Citicorp Ctr., New York NY 10022
(212) 888-0800

Counsel for Defendants
Joseph Calderon
Linden & Deutsch
320 Park Ave., New York NY 10022
(212) 593-3560