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Union Carbide Corp. v. Thiokol Corp.

ELR Citation: 26 ELR 20437
Nos. No. CV293-66, 890 F. Supp. 1035/(S.D. Ga., 10/17/1994)

The court holds that the past owner of a contaminated site is liable to the current owner under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for investigatory costs the current owner incurred at the site's solid waste management units (SWMUs). The court first holds that the current owner's CERCLA claims regarding a landfill at the site are subject to a six-year statute of limitations, which began to run at the initiation of physical on-site construction. The building of a fence at the landfill constitutes such construction. Because the initiation of the construction began in February 1987, the statute of limitations on the current owner's CERCLA claim for remedial action at the landfill expired before the filing of its lawsuit. The court next holds that the SWMUs should be considered separate facilities from the landfill, and as such are subject to a different statute of limitations. The court holds that cleanup activities at the SWMUs are removal actions and that the actions to recover costs and for contribution there were timely filed.

The court holds that the past owner was the owner and operator of a facility within the meaning of the statute at the time hazardous substances were disposed of there, there has been a release or threat of release of these substances, and the current owner has incurred response costs. The court further holds that the current owner's monitoring and assessment costs were necessary costs under CERCLA. The court, however, grants the past owner summary judgment on the current owner's claim for attorney fees, because the current owner has not introduced evidence that any of the attorneys fees were part of the actual cleanup costs. The court grants the current owner summary judgment on its claim for investigatory costs at the SWMUs, but denies summary judgment to both parties on remedial action that the current owner has not yet undertaken at the SWMUs. The court also holds that the past owner may not assert a defense of laches to liability under CERCLA §107. The court next holds that summary judgment for the past owner on contribution regarding the landfill is appropriate, but holds that the past owner may be liable under §107 for the cleanup of the SWMUs. In addition, the court denies the past owner summary judgment on the current owner's request for declaratory relief, because such relief may be appropriate if the past owner is held liable under §107 at trial.

The court next addresses the current owner's claim that it is entitled to indemnification pursuant to an agreement under which the past owner processed a pesticide for the current owner. The past owner alleges that the current owner's claims are barred by a later agreement under which the current owner purchased the site from the past owner. Both agreements provide for the past owner to indemnify the current owner for damages resulting from the past owner's business at the site. The current owner argues that an amendment to the processing agreement supersedes the agreement's survival clause, which does not provide for the continuation of the indemnification. The past owner argues that the purchase agreement, which provides that its indemnification provision only survives 18 months, cancelled the processing agreement. The court finds that the amendment to the processing agreement is ambiguous. Extrinsic evidence of the parties' intent is necessary to determine the correct interpretation. The issue of whether the processing agreement is subject to the 18-month survival clause of the purchase agreement also rests on the intent of the parties. The court finds that genuine issues of material fact remain concerning indemnification under the processing agreement and that a trier of fact must consider extrinsic evidence to determine the intent of the parties respecting the contract terms. The court next holds that the clear meaning of the purchase agreement is to limit the past owner's indemnification of the current owner to 18 months, but there is no clear expression of an intent to release the past owner from all CERCLA liabilities.

The court denies the current owner summary judgment on its contribution and indemnity claims. The past owner can be a joint tortfeaser if it acted negligently, but negligence is a question for the trier of fact. Because actions for contribution and indemnity are governed by a 20-year statute of limitations, the current owner's claims are not barred by the statute of limitations. The court holds, however, that genuine issues of material fact precluding summary judgment remain as to whether there has been an unreasonable delay by the current owner and whether there has been substantial prejudice to the past owner. The court denies the past owner summary judgment on its counterclaim under CERCLA §107, because the past owner has not described its response costs or demonstrated that they are necessary or consistent with the national contingency plan. Because §107 is a prerequisite for a §113 contribution claim, the court holds that the past owner is not entitled to summary judgment on its §113 claim. And because declaratory relief is also premised on §107 liability, the court holds that summary judgment on the past owner's claim for declaratory relief is inappropriate.

Counsel for Plaintiff
Arnold C. Young
Hunter, Maclean, Exley & Dunn
200 E. St. Julian St., Savannah GA 31412
(912) 236-0261

Counsel for Defendants
Wallace E. Harrell
Gilbert, Harrell, Gilbert, Sumerford & Martin
First Federal Plaza, Ste. 200, Brunswick GA 31521
(912) 265-6700