Kemper Prime Industrial Partners v. Montgomery Watson Americas, Inc.

No. 97 CIV 4278 (N.D. Ill. June 26, 2000)

ELR Digest

The court denies motions to dismiss an engineering company's third-party Resource Conservation and Recovery Act (RCRA), Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and contractual indemnification claims against the former managing partner of an industrial corporation that sued the company for allegedly negligently misrepresenting an environmental assessment thereby causing the corporation to purchase contaminated property. The corporation filed suit against the company to recover cleanup costs at the site, and the company then filed a third-party action against the managing partner.

The court first holds that the company's RCRA and CERCLA claims properly impleaded the managing partner. The underlying negligent misrepresentation claim against the company arose as a result of necessary remediation of the contaminated property. Similarly, the company's claims against the managing partner arose as a result of the costs of remediating the property and are in defense of the services the company performed in evaluating the site. Thus, there is a factual connection between the underlying claim and the third-party claims. Moreover, the managing partner could be secondarily liable to the company for its negligence in not cleaning up the property. The court then holds that it has subject matter jurisdiction over the company's RCRA and CERCLA claims. The company properly alleged that the managing partner falls within the category of those potentially liable under RCRA and CERCLA. The court next holds that the company has standing to bring its RCRA and CERCLA claims. The company's injury-in-fact, the underlying suit, and associated expenses already incurred, are concrete and particularized and actual or imminent, not conjectural or hypothetical. Additionally, the RCRA citizen suit penalties prayed for apparently would redress the alleged injury-in-fact. The court also holds that the company's contractual indemnification claim survives a motion to dismiss because the indemnity language set forth in a contract between the company and the managing partner may protect the company from liability.

The full text of this opinion is available from ELR (8 pp., ELR Order No. L-242).

Counsel for Plaintiffs
Daniel J. Biederman
Chuhak & Tecson
225 W. Washington St., Ste. 1300, Chicago IL 60606
(312) 444-9300

Counsel for Defendant
Daniel C. Murray
Johnson & Bell
55 E. Monroe St., Ste. 4100, Chicago IL 60603
(312) 372-0770

[30 ELR 20751]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]