Estate of Williams v. Borgwarner Morse Tec Inc.

• Citation: 110 N.E.3d 1148
• Decision Date: 28 August 2018
• Docket Number: Court of Appeals Case No. 49A02-1710-PL-2224
• Parties: ESTATE OF Walter E. WILLIAMS, Appellant (Third-Party Plaintiff), v. BORGWARNER MORSE TEC INC., et al., Appellees (Third-Party Defendants). Chuck Markey, Markey's Audio Visual, Inc., and D & E Enterprises, Plaintiffs, v. George F. Kopetsky, Patricia A. Kopetsky, George F. Kopetsky Realty Corp., Walter E. Williams, Edward F. Frazier, John Bartkiewicz, Richard Clapper, and Ted Pollard, Defendants.
• Court: Court of Appeals of Indiana

110 N.E.3d 1148

ESTATE OF Walter E. WILLIAMS, Appellant (Third-Party Plaintiff),

v.BORGWARNER MORSE TEC INC., et al., Appellees (Third-Party Defendants).

Chuck Markey, Markey's Audio Visual, Inc., and D & E Enterprises, Plaintiffs,

v.George F. Kopetsky, Patricia A. Kopetsky, George F. Kopetsky Realty Corp., Walter E. Williams, Edward F. Frazier, John Bartkiewicz, Richard Clapper, and Ted Pollard, Defendants.

Court of Appeals Case No. 49A02-1710-PL-2224

Court of Appeals of Indiana.

Filed August 28, 2018

Attorneys for Appellant: Donn H. Wray, Glenn D. Bowman, Marc A. Menkveld, Stoll Keenon Ogden PLLC, Indianapolis, Indiana

Attorneys for Appellee, BorgWarner Morse Tec Inc.: Richard S. VanRheenen, Tabitha L. Balzer, Lewis Kappes, P.C., Indianapolis, Indiana

Brown, Judge.

[1] The Estate of Walter E. Williams (the "Estate") appeals the trial court's entry of summary judgment in favor of BorgWarner Morse TEC, Inc. ("Morse TEC").¹ The Estate raises one issue which we revise and restate as whether the court erred in entering summary judgment in favor of Morse TEC. We affirm.

Facts and Procedural History

[2] This case involves an Environmental Legal Action ("ELA") under Ind. Code §§ 13-30-9. In the 1960s, George Kopetsky constructed a building to house a laundromat and dry cleaning operation on property he owned at 2915 South Meridian Street, Indianapolis, Indiana (the "Site"). Kopetsky purchased coin-operated washing and dry cleaning machines and named the location Norge Laundry & Dry Cleaning Village ("Norge Village"). Kopetsky operated Norge Village until 1967 when he leased it to Edward Frazier, who operated it until September 29, 1969, when Williams purchased the Site and assumed Kopetsky's mortgage.

[3] Williams operated Norge Village until May 1, 1974. He leased the Site to others, including John Bartkiewicz and Richard Clapper, who continued to operate Norge Village pursuant to a lease agreement. At some point, Clapper withdrew from the lease arrangement. In 1981, Norge Village ceased operation at the Site and the machines were removed. On August 25, 1995, Williams sold the Site to D & E Enterprises.

[4] On July 12, 2006, Chuck Markey, Markey's Audio Visual, Inc., and D & E Enterprises, Inc., filed a complaint against Williams and others for environmental response costs, attorney fees, and damages under Ind. Code §§ 13-30-9 to recover the costs of remedial action involving hazardous substances released into the soil and groundwater. The complaint alleged that Markey was the owner of Markey's Audio Visual, Inc., and D & E Enterprises, Inc., and that D & E Enterprises, Inc., was the current owner of the Site.

[5] On April 30, 2008, Williams filed a third-party complaint against "Borg-Warner Morse TEC Corporation." Appellee's Appendix Volume 2 at 37. On March 25, 2010, Williams amended its complaint, naming the defendants as "BorgWarner Corporation," "Borg-Warner Corporation, as successor in interest to Norge Corporation," Morse TEC, and Burns International Services Company, LLC, ("Burns"). Id. at 44. The amended complaint stated in part:

3. ... Norge Corporation is a corporation that does or has existed, and conducted business in Indiana relating to its sale and installation of dry cleaning equipment.

4. ... Borg-Warner is a Delaware corporation that conducted business in Indiana at all times relevant to this Complaint through the sale of Norge brand dry cleaning equipment by its Norge Division.

5. ... Borg-Warner is a successor in interest to the Norge entity that conducted business in Indiana relating to the sale and installation of Norge brand dry cleaning equipment.

6. ... Morse TEC[ ] ... conducted business at all times relevant to this Third-Party Complaint through the sale of Norge brand dry cleaning equipment by its Norge Division.

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10. ... [George and Patricia Kopetsky] purchased Norge dry cleaning equipment and other cleaning equipment ("Equipment") in the mid- to late- 1960s.

11. ... [R]epresentatives of Norge installed some or all of the equipment.

12. ... Borg-Warner owned and operated the Norge division from approximately 1929 until selling the Norge division ... on July 1, 1968.

13. ... Morse TEC is the corporate successor in interest to BorgWarner that formerly owned and operated the Norge division, including but not limited to the manufacture and installation of [the Norge dry cleaning equipment and other equipment].

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22. It is also believed that release of chlorinated solvents occurred when used or spent chlorinated solvents were discharged to the public sewers as arranged and directed by BorgWarner and Morse TEC.

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32. To the extent this Court, pursuant to I.C. 13-30-9-3, in resolving this environmental legal action, allocates the cost of removal or remedial action in proportion to the acts or omissions of each party, Williams alleges that Morse TEC is wholly liable for the release of chlorinated solvents at the Site.

Id. at 45-46, 48-49.

[6] Morse TEC and Burns filed separate motions for summary judgment on Williams's amended third-party complaint.²

On August 28, 2013, the court granted Burns's motion, denied Morse TEC's motion, and found, with respect to Burns, that Williams lacked standing to assert a contract claim against Burns, that no corporate successor liability had been created "by the ELA that would transfer financial responsibilities from the Norge Division to Burns," and that there was no other basis for imposing successor liability on Burns. Appellant's Appendix Volume 2 at 71.

[7] With respect to Williams, the court found the costs incurred to date by him were "costs of removal and remedial action," he is a real party in interest to pursue his third-party ELA claim against Morse TEC, and that the fact that Williams's insurer, rather than Williams himself, paid the remedial and removal costs incurred to date does not diminish or destroy his standing to bring an ELA claim against Morse TEC. Id. at 72. In also concluding that an ELA defendant may bring a third-party ELA claim against other potentially responsible parties, the court stated:

Williams can maintain an ELA claim against Morse TEC, but there is still a genuine issue of material fact as to whether Morse TEC is liable. This Court concludes that Williams has properly asserted a third-party claim against Morse TEC, and Morse TEC potentially may be allocated its share of responsibility according to the purpose and plain language of the ELA.

Id. at 74.

[8] On January 9, 2017, Morse TEC filed a second motion for summary judgment.³ Its accompanying memorandum in support of the motion stated in relevant part:

Cases interpreting the ELA have construed the "caused or contributed to the release" element of the statute to require a defendant's active involvement in releasing or spreading hazardous substances at a site or, in the limited case of a landlord with actual knowledge of a release of hazardous substances, having sufficient control over the site to halt or remediate the release, yet failing to act. It is undisputed that Norge never released or spread PCE at the [S]ite. [Norge] never handled PCE at the Site or operated the dry cleaning machines at the Site. It was Williams (and others) who handled PCE at the Site and operated the dry cleaning machines. Furthermore, Norge never owned the Site, and therefore was never a landlord with knowledge of a release at the Site and control over the Site. Thus, Williams' allegations that Norge manufactured and installed dry cleaning machines at the Site are insufficient as a matter of law to support ELA liability. Additionally, even if installation of the dry cleaning machines could support ELA liability (and it cannot), there is no evidence that Norge installed the dry cleaning machines....

Finally, Williams' ELA claim, brought against a manufacturer for property damage, is a products liability claim in disguise, and is barred by the applicable Indiana Products Liability Act statute of limitations.

Id. at 149-150.

[9] On April 3, 2017, Williams filed a memorandum in opposition to the second motion for summary judgment, which argued in relevant part that discovery to date showed that Morse TEC was liable "because the Norge dry cleaning system, as designed and described in Norge Operating Manuals, provided for the dry cleaning machine's water/PCE separator to be plumbed directly to drains." Id. at 180.

[10] On April 17, 2017, Morse TEC filed its reply and, on May 1, 2017, the court held a hearing. On August 23, 2017, the court granted Morse TEC's motion for summary judgment in an order which stated in relevant part:

Facts

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The machines sat along the north and east wall of the building on a floor that was recessed between 4.5 and 5 inches. The Norge service instructions recommended all the dry cleaners be set upon a 4" high concrete "dike" to entrap solvent that might escape from the system.

The ‘diked’ area should be connected to a floor drain in which the cleaning solvent can flow to an underground storage tank. In cases where a major solvent leak may occur, the solvent may be pumped from the underground storage tank back into the Dry Cleaning System after the leak has been corrected.

The manual also provided, "The successful operation of the Norge Automatic Dry Cleaning Equipment is directly influenced by the type of installation."

The dry cleaning equipment always used PCE as a solvent to clean the clothing, "NorgClor, which was a PCE-based solvent made to Norge's specifications by the Dow Chemical Company and distributed by Norge's exclusive distributors." The Norg-Clor PCE solvent was reclaimed from each dry cleaning load's cycle. "Part of the solvent reclamation process involved an oil-water separator in which the solvent was separated from water. The water was discharged to a sanitary sewer and the reclaimed solvent was diverted back into the solvent tank. The water discharge contained ‘10 or 20 drops’ of solvent per load." The Norge coin operated dry cleaning machine manual recommended

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