183 F.3d 1269 (11th Cir. 1999), 97-9357, Canadyne-Georgia Corp v Nationsbank N.A.

Docket Nº:97-9357
Citation:183 F.3d 1269
Party Name:CANADYNE-GEORGIA CORPORATION, Plaintiff-Appellant, v. NATIONSBANK, N.A. (SOUTH), as successor by merger to Bank South, f.k.a. Bank South, N.A., etc., Individually and in its capacity and executor and trustee of the J.W. Woolfolk Trust; THE J. W. WOOLFOLK TRUST, et al., Defendants-Appellees.
Case Date:August 11, 1999
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1269

183 F.3d 1269 (11th Cir. 1999)

CANADYNE-GEORGIA CORPORATION, Plaintiff-Appellant,

v.

NATIONSBANK, N.A. (SOUTH), as successor by

merger to Bank South, f.k.a. Bank South, N.A., etc.,

Individually and in its capacity and executor and trustee

of the J.W. Woolfolk Trust; THE J. W. WOOLFOLK

TRUST, et al., Defendants-Appellees.

No. 97-9357

IN THE UNITED STATES COURT OF Appeals, FOR THE ELEVENTH CIRCUIT

August 11, 1999

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Middle District of Georgia D. C. Docket No. 5:96-CV-114-1(DF)

Before EDMONDSON and BLACK, Circuit Judges, and RESTANI[*], Judge.

BLACK, Circuit Judge:

Appellant Canadyne-Georgia Corporation (Canadyne) appeals the district court's dismissal, pursuant to Fed. R. Civ. P. 12(b)(6), of Canadyne's complaint against NationsBank, N.A. (South) (the Bank). Canadyne's allegations, if proved, would support its claims against the Bank. Accordingly, we reverse the district court's dismissal of the complaint and remand for further proceedings.

I. BACKGROUND

Between 1990 and 1995, the Environmental Protection Agency (EPA) issued orders requiring, among other things, that Canadyne evaluate property in Fort Valley, Georgia (the Site), relocate residents living near the Site, remove contaminated soil from the Site, and purify the groundwater at the Site. Under the direction of the EPA and the Georgia Environmental Protection Division (GEPD), Canadyne has spent the last decade and many millions of dollars cleaning up the Site. On March 22, 1996, Canadyne sued the Bank, as well as the J. W. Woolfolk Trust (the Woolfolk Trust), the current trustees of the Woolfolk Trust, Woolfolk Chemical Works, Ltd. (WCW), and certain former partners in WCW, claiming they were liable under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA), the Georgia Hazardous Site Response Act (HSRA), and Georgia common law for response costs Canadyne has incurred in cleaning up the Site.

The parties' connection to the Site goes back over 80 years. In 1921, Mr. John W. Woolfolk founded a company, which in 1941 became WCW. Mr. Woolfolk was a general partner in WCW, which manufactured pesticides at the Site from 1942 to 1972. Woolfolk's pesticide plant released the hazardous substances, including arsenic, that Canadyne has been required to clean up.

In 1942, Mr. Woolfolk established for the benefit of his daughters three inter vivos trusts, for which the Bank's predecessor, Fulton National Bank of Atlanta, served as co-trustee.1 The trusts owned greater than 50% of the limited partnership interests in WCW. Mr. Woolfolk died in 1945. His will named the Bank as co-executor of his estate, which included his general partnership interest in WCW. Five years later, the Bank became a trustee of the Woolfolk Trust, the assets of which included Mr. Woolfolk's general partnership interest in WCW.

In 1972, WCW incorporated, and in 1977, it was purchased by a corporate affiliate of Canadyne. Canadyne sold the pesticide business and most of its assets in 1984. Subsequently, the Bank resigned as trustee of the Woolfolk Trust and the inter vivos trusts and delivered the trust assets to new trustees. As discussed above, it was not until the 1990s that the EPA required Canadyne to clean up the Site.

Canadyne sued, and the Bank moved to dismiss Canadyne's amended complaint under Rule 12(b)(6) for failure to state a claim upon which relief could be granted. The district court granted the Bank's motion, concluding the Bank was not a "covered

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person" within the meaning of § 107(a)(1) of CERCLA.2 Canadyne-Georgia Corp. v. NationsBank, 982 F.Supp. 886, 890 (M.D. Ga. 1997). As for Canadyne's state law claims, the district court held that, as Georgia's HSRA statute incorporates the same definitions and standards for owner and operator liability as CERCLA, dismissal of Canadyne's CERCLA claims mandated dismissal of its state law HSRA claim. Id. at 891. The district court further held that, since the Bank had no liability under either CERCLA or HSRA, Canadyne's other state law claims under Georgia common law for contribution, indemnity, and restitution also failed as a matter of law. Id. On appeal, Canadyne asserts the district court erred in concluding that the Bank was not a "covered person" under CERCLA.3

II. STANDARD OF REVIEW

"In reviewing de novo a dismissal pursuant to Rule 12(b)(6), we apply the same standard as did the district court." South Florida Water Management Dist. v. Montalvo, 84 F.3d 402, 406 (11th Cir. 1996) (citation omitted). "The motion must be denied unless it is clear the plaintiff can prove no set of facts in support of the claims in the complaint." Id. (citation omitted).

III. DISCUSSION

Canadyne brought its CERCLA contribution claim against the Bank under §§ 107(a) and 113(f) of CERCLA, codified at 42 U.S.C. §§ 9607(a), 9613(f). Section 113(f) provides "[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) [§ 107(a)] of this title." 42 U.S.C. § 9613(f)(1).

Canadyne alleges the Bank is liable as an "owner" of the Site under § 107(a)(2) of CERCLA, which imposes liability on "any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of."4 42 U.S.C. § 9607(a)(2) (emphasis added). In this regard, Canadyne emphasizes that during the time of contamination, the Bank served as a trustee for trusts, the assets of which included a general partnership interest and limited partnership interests in WCW, the company that allegedly contaminated the Site. In response, the Bank contends it cannot be deemed an "owner" under § 107(a)(2) and, even if it can, it is exempt from liability under the Asset Conservation Act.5

CERCLA imposes two barriers Canadyne must overcome at the outset to avoid

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dismissal of its claims against the Bank. First, CERCLA subjects only "covered persons" to liability. There are only four classes of potentially responsible parties under § 107(a). 42 U.S.C. § 9607(a). As discussed above, Canadyne claims the Bank is potentially responsible, because it was an "owner" of the Site at the time of the disposal of hazardous substances. Second, even if deemed "owners" under CERCLA, fiduciaries like the Bank are protected from personal liability...

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