Jump to Navigation
Jump to Content

Lion Oil Co. v. Tosco Corp.

ELR Citation: 26 ELR 21584
Nos. No. 95-3270, 90 F.3d 268/43 ERC 1094/(8th Cir., 07/19/1996)

The court upholds a district court decision that a sale agreement and release for the purchase of an oil refinery unambiguously limit the seller's potential contribution liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for the buyer's costs in cleaning up hazardous materials that leaked from the refinery's solid waste management units (SWMUs). The court notes that the agreement contained a broad indemnity provision that encompassed environmental harm caused by the seller. One section of the agreement specifically referred to CERCLA, and the release absolved the seller from all obligations under that section. The court holds that the agreement and release unequivocally combine to allocate to the buyer any potential liability arising under CERCLA. The parol evidence rule prohibits the admission of extrinsic evidence to alter these otherwise unambiguous contracts. Thus, the buyer cannot offer evidence to show that the agreement and release were meant to cover only the two hazardous waste management units on the site and were not a general limitation on potential CERCLA liability arising from the refinery's SWMUs. The court notes that this is not a case in which an unsophisticated party hastily entered into a contract. It is clear that the buyer was aware that the purchase of an oil refinery involved a risk of significant potential environmental liability, as exhibited in the agreement's detailed provisions.

Counsel for Appellant
Mark L. Austrian
Collier, Shannon, Rill & Scott
3050 K St. NW, Washington DC 20007
(202) 342-8495

Counsel for Appellee
Alvin K. Hellerstein
Stroock, Stroock & Lavan
Seven Hanover Sq., New York NY 10004
(212) 806-5400

Before BOWMAN, Circuit Judge, HENLEY, Senior Circuit Judge, and WOLLMAN, Circuit Judge.