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Gopher Oil Co. v. Union Oil Co. of Cal.

ELR Citation: 22 ELR 21005
Nos. Nos. 91-1159 et al., 955 F.2d 519/34 ERC 1709/(8th Cir., 01/28/1992)

The court holds that a vendor of property contaminated by petroleum products fraudulently misrepresented the property's contamination to the purchaser, and the vendor is 100 percent liable for cleanup costs. The court first holds that the vendor failed to make a timely objection to the jury instructions. The appellate court is therefore limited to correcting only plain errors as necessary to avoid a miscarriage of justice. The court holds that the circumstances of the case do not rise to the level of plain error, because the district court properly relied on the Minnesota Jury Instruction Guide on the elements and standard of proof for fraud, and the instructions did not mislead the jury. The court next holds that the vendor's failure to move for a directed verdict or for judgment notwithstanding the verdict constitutes a waiver of its right to challenge the jury's findings. The court thus holds that the district court did not abuse its discretion in denying the vendor's motion for a new trial. The substantiality of the evidence is not in question, and as a matter of law, it cannot be said that there was a complete absence of evidence to support thejury verdict. The court next holds that the district court properly allocated 100 percent of the cleanup costs to the vendor. The court concludes that allocation of liability under the Comprehensive Environmental Response, Compensation, and Liability Act and the Minnesota Environmental Response and Liability Act is an equitable determination in which the district court must make its own factual findings and legal conclusions. The court also holds that the "as is" clause in the purchase agreement is ineffective to transfer the vendor's liability for environmental cleanup expenses to the purchaser, because the vendor fraudulently induced the purchaser to enter into the purchase agreement. The court remands the district court's award of attorney fees to exclude payment for work related to the fraud litigation. The court finally holds that the calculation of out-of-pocket damages may be based on the difference between the purchase price of the contaminated site and the value of the site after the completion of cleanup.

Counsel for Appellant
Joe A. Walters
O'Connor & Hannan
3800 IDS Center, 80 S. 8th St., Minneapolis MN 55402
(612) 343-1200

Counsel for Appellee
Brian B. O'Neill
Fraegre & Benson
2200 Norwest Center, 90 S. 7th St., Minneapolis MN 55402
(612) 336-3000

Before WOLLMAN, Circuit Judge, BRIGHT and ROSS, Senior Circuit Judges.