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Dent v. Beazer Materials & Servs., Inc.

ELR Citation: 28 ELR 20579
Nos. No. 96-1148, 133 F.3d 914/(4th Cir., 01/21/1998)

The court holds that the owner of a wood treatment plant is liable under the Comprehensive Environmental, Response, Compensation, and Liability Act (CERCLA) for all past and future response costs incurred during the remediation of a South Carolina Superfund site. The Superfund site at issue is made up of two adjoining tracts of land. A large wood treatment plant was operated on one tract, and two successive owners of the second tract operated a fertilizer manufacturing plant. From 1963 to 1968, the wood treatment plant leased a fouracre parcel of the second tract for use in connection with its wood treating operation. Wood treating chemicals were released into the Ashley River when the current owner of the second tract dredged a barge canal.

The court first holds that the two previous owners of the second tract are not jointly and severally liable under CERCLA §107(a)(2) for the response costs incurred in the cleanup of wood treating chemicals. The district court correctly ruled that no harm caused by wood treating chemicals could be attributed to the previous owners. No wood treating chemicals were released by the previous owners during their ownerships, and they could not be held to have released those chemicals simply because the substances leached onto their property from a release point on the plant's property. Moreover, the district court did not err in finding that fertilizer chemicals on the site, for which the previous owners were potentially liable, caused no harm requiring remediation. The only fertilizer-related hazardous substance in evidence at trial was lead, and credible evidence existed that it was in quantities too low to require CERCLA remediation.

The court next holds that the district court did not err when it entered declaratory judgment assigning all future response costs incurred at the site to the plant. Under CERCLA §113(g)(2), even if multiple response costs actions exist, the court in the first action to reach a decision on cost recovery is required to enter judgment as to liability for response costs, and that judgment has a preclusive effect as to liability and successive actions. The court also holds that when the plant's conduct during pretrial, trial, and post-trial activities is considered, the district court correctly refused to reopen the trial so that the plant could offer new proof of the previous owners' response cost liability. The court then holds that the district court properly held that the previous owner that leased the four-acre parcel to the plant was entitled to contractual indemnification. The lease's indemnification provision obligates the plant to hold the previous owner harmless from any and every claim arising from the plant's use of the leased premises. And the jury found that the previous owner's potential liability arose only because of the plant's use of the leased parcel. Further, the court holds that the district court did not err in interpreting the indemnification provision to cover the CERCLA claim at issue. The indemnification provision could not be more general and suffices to cover the CERCLA claims at issue. Last, the court holds that the district court did not err in entering judgment in favor of the other previous owner's equitable indemnification claim against the plant. The jury found that the current owner of the site sued the previous owner solely as a result of the plant's conduct in contaminating the property and not because of the previous owner's conduct. This fact sufficed to invoke equitable indemnification principles under South Carolina law.

Counsel for Plaintiffs
Robert E. Stepp
Glenn, Murphy, Gray & Stepp
BB&T Bank Bldg.
1901 Assembly St., Ste. 390, Columbia SC 29202
(803) 765-1100

Counsel for Defendant
Mark R. Zehler
Legal Department
Conoco, Inc.
600 N. Dairy Ashburn St., Houston TX 77079
(713) 635-3973

Samuel J. Morley
Holland & Knight
315 Calhoun St., Ste. 600, Tallahassee FL 32301
(850) 224-7000

Before Widener and Doumar, JJ.