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Burns Philp Food, Inc. v. Cavalea Continental Freight, Inc.

ELR Citation: 28 ELR 21038
Nos. Nos. 97-2557, -2737, 135 F.3d 526/(7th Cir., 02/04/1998)

The court holds that a district court did not abuse its discretion in finding expert testimony concerning a corporation's claim of land contamination by a neighboring company to be unreliable. The corporation's contamination claim arose as a response to a trespassing counterclaim that the neighboring company made to the corporation's tax reimbursement suit. The court first holds that the corporation's suit seeking reimbursement for taxes it mistakenly paid on the neighboring company's land is an action at law, and that the five-year statute of limitations must be applied. The corporation's claim is best characterized as one for restitution rather than constructive trust. The neighboring company was not the corporation's fiduciary, and it neither received nor held money on the corporation's behalf. The court next holds that on remand the district court must limit the corporation's recovery to those taxes paid on the neighboring company's behalf within five years before filing suit. In Illinois the limitations period begins not with the injury's actual discovery, but when the injury could have been discovered through the exercise of appropriate diligence. Since the day it bought the property, the corporation had in its files everything needed to determine who must pay real estate taxes on which parcels. The court also holds that the neighboring company is entitled to damages in its trespass action if it suffered monetary loss due to a fence the corporation built 20 feet into the neighboring company's lot.

Last, the court holds that the district court did not abuse its discretion in finding expert testimony concerning land contamination unreliable. The corporation tried to prove that diesel fuel from the neighboring company's land flowed on to the surface of its land by showing that the surface sloped from the neighbor's property toward its own and that at least one location on its land has hydrocarbon residue. The district judge disbelieved the testimony the corporation offered. The judge concluded that the corporation did not even prove which way the surface sloped; it offered principally eyeball estimates of which the judge was skeptical. In addition, the judge thought that an environmental consultant, who supervised the collection of samples from one location on the corporation's site, was unprofessional and that his proposed inference—that because the hydrocarbons could not have come from the corporation's operations they must have come from the neighbors—was unwarranted. District court judges have an obligation to ensure that purportedly scientific expert testimony is reliable. The district judge inquired and found the evidence unreliable.

Counsel for Plaintiff
J. Reed Millsaps
Millsaps & Co.
3100 Dundee Rd., Northbrook IL 60062
(847) 730-2668

Counsel for Defendants
Daniel J. Voelker
Seyfarth, Shaw, Fairweather & Geraldson
55 E. Monroe St., Ste. 4200, Chicago IL 60603
(312) 346-8000

Before Flaum and Wood, JJ.