Amoco Pipeline v. Herman Drainage Systems, Inc.

• Decision Date: 06 February 2002
• Docket Number: Case No. 1:00-CV-729.
• Citation: 212 F.Supp.2d 710
• Parties: AMOCO PIPELINE COMPANY, Plaintiff, v. HERMAN DRAINAGE SYSTEMS, INC., James Herman, Eric Herman, and Larry Timm and Carlen Timm, both individually and jointly and severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

212 F.Supp.2d 710

AMOCO PIPELINE COMPANY, Plaintiff, v. HERMAN DRAINAGE SYSTEMS, INC., James Herman, Eric Herman, and Larry Timm and Carlen Timm, both individually and jointly and severally, Defendants.

Case No. 1:00-CV-729.

United States District Court, W.D. Michigan, Southern Division.

February 6, 2002.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Gene S. Davis, Detroit, MI, for Plaintiff.

Michael B. Ortega, Kalamazoo, MI, James R. Durant, Portage, MI, James W. Smith, Kalamazoo, MI, for Defendants.

OPINION

QUIST, District Judge.

Plaintiff, Amoco Pipeline Company ("Amoco"), has sued Defendants, Herman Drainage Systems, Inc. ("HDS"), James Herman, Eric Herman (referred to along with James Herman as the "Hermans"), and Larry and Carlen Timm (the "Timms"), in this diversity action alleging claims for violation of the Michigan "MISS-DIG" act for the protection of underground facilities, M.C.L. §§ 460.701.718, negligence, trespass on Amoco's pipeline easement, and performance of an inherently dangerous activity without taking special precautions to avoid harm. The incident upon which Amoco's claims are based occurred on March 16, 1999, when the Hermans struck Amoco's pipeline and caused it to rupture while laying drainage tile for the Timms in the Timms' field. Now before the Court are: (1) Amoco's motion for partial summary judgment; (2) the Timms' motion for summary judgment; and (3) Amoco's motion to amend its complaint to add a claim under the Michigan Natural Resources Environmental Protection Act.

Facts

The State of Michigan has enacted a law designed to prevent damage to underground facilities during excavation or other similar activity (the "MISS-DIG act" or "Act") by requiring certain persons to notify the MISS-DIG association prior to conducting such activities. After receiving notice, the association notifies its members to enable them to mark the location of their underground facilities in the area in which the activity is to occur. Section 5(1) of the MISS-DIG act provides, in relevant part, that

a person ... responsible for excavating ... in a street, highway, other public place, a private easement for a public utility, or near the location of utility facilities on a customer's property ... shall give written or telephone notice to the [MISS-DIG] association ... at least 2 full working days ... but not more than 21 calendar days, before commencing the excavating....

M.C.L. § 460.705(1).

Amoco is engaged in the business of providing and maintaining pipelines for the transport of gasoline and other petroleum substances. Amoco owns and maintains a pipeline which runs between Whiting, Indiana and River Rouge, Michigan. The pipeline runs through Branch County, Michigan, and in particular, in a southwesterly to northeasterly direction through a 254 acre field owned by the Timms located in the north half of section 35, Sherwood Township (the "field"). Amoco located and maintained the pipeline in the field pursuant to an easement granted in 1948 by the Timms' predecessor-in-interest to Amoco's predecessor-in-interest, Standard Oil Company.

Throughout this litigation, the parties have referred to the field as consisting of an east field and a west field. As depicted on the photographs and other exhibits submitted by the parties in support of and in opposition to the motions, the east field and the west field are roughly divided by a county drain which runs across the field in a north and south direction. (Pl.'s Resp. Defs. Timm Mot. Ex. A; Defs. Timm Exs. Supp. Mot. Ex. B.) The drain is open in the north part of the field. An untillable marsh area is located immediately to the west of the open drain and a wooded area is located adjacent to the southeast corner of the marsh. A pile of stones is located immediately west of the wooded area. The pipeline runs through the west field immediately south of the stone pile and continues through the marsh and into the east field.

Eric Herman and his father, James Herman, are full-time farmers and have lived on and farmed land in the area near the field for many years. (James Herman 6/20/01 Dep. at 3-5, Defs. Timm Exs. Supp. Mot. Ex. M; Eric Herman 6/20/01 Dep. at 3-4, Defs. Timm Ex. Supp. Mot. Ex. K.) Based upon their experience in the area, both men were familiar with the pipeline; in fact, it runs across their respective farms. (James Herman 6/20/01 Dep. at 10.) Eric Herman organized HDS in 1996 for the purpose of conducting a drain tile installation business. HDS's equipment consists of a bulldozer with a tile plow attached and a stringer cart that holds the drain tile as it is being installed. A laser mounted on the bulldozer helps to ensure that the tile is installed on a proper grade. Eric Herman is the only employee of HDS, although James Herman sometimes provides labor to HDS as an independent contractor. (James Herman Aff. ¶¶ 6-8, Def. J. Herman's Br. Opp'n Ex. 9.) Because Eric Herman installed drain tile on a part-time basis, by 1998 he had done only eight or nine jobs. (Eric Herman 6/20/01 Dep. at 37-38.)

The Timms, who are also engaged in farming, purchased the field in 1988 and, because they were familiar with the area, were aware that the pipeline ran through the field even prior to that time. In late 1997 or early 1998, Larry Timm and a neighbor installed drain tile in the east field near the pipeline in order to make more of the land tillable. At that time, Timm called MISS-DIG and had the area flagged, or marked in order to avoid hitting the pipeline. (Larry Timm Dep. at 39-40, Pl.'s Br. Supp. Ex. 3.)

In 1998, Timm spoke with Eric Herman about installing additional drain tile in the east field. Timm decided to have HDS perform the work because Timm's previous work did not improve the drainage and HDS had equipment Timm did not have that would allow the drain tile to be placed at the proper grade. After some discussions, the parties reached an oral agreement that HDS would do the work and charge 28¢ per foot for the installation. There was no written contract. Initially, Timm told Eric Herman that he wanted four-inch lines run easterly to the six-inch line Timm and his neighbor had previously installed. (Larry Timm. Aff. ¶ 9, attached to Defs.' Timm Mot. Summ. J.) However, after surveying the field, Eric Herman advised Timm that because the field was so flat, several four-inch tiles should run in a southwesterly direction parallel with the pipeline into the drainage ditch.¹ (Id.; Eric Herman 6/20/01 Dep. at 49-50.) Eric Herman and Timm agreed that the lines should be spaced fifty feet apart, after Timm rejected Eric Herman's suggestion that the tiles be laid closer together. (Eric Herman 12/19/00 Dep. at 49, Pl.'s Br. Supp. Ex. 5.)

Although Eric Herman, James Herman, and Timm were aware of the pipeline, they did not discuss who would be responsible for calling MISS-DIG. However, Eric Herman made the call and notification was given to Amoco. On June 26, 1998, after receiving the information, Amoco's head pipeliner, Harland Brown ("Brown"), visited the site to flag the pipeline according to the information he received from MISS-DIG. Brown flagged the pipeline in the east field from Van Warmer Road up to the drainage ditch. (Brown Dep. at 21, Defs.' HDS and Eric Herman Br. Supp. Mot. Ex. 4.) After speaking with Eric Herman, Brown returned to the field a few weeks later and marked from the other side of the drainage ditch through the marsh up to the edge of the west field. (Id. at 22, 38-39.)

Eric Herman and James Herman completed most of the work in the east field in March 1999 without incident. At the conclusion of that work, Timm asked Eric Herman to install three drain tiles in the west field beginning at the ditch, going around the woods, and stopping short of the stone pile. Although the proposed installation would cross the pipeline, no one called MISS-DIG and the pipeline was not flagged. On March 15, while laying tile in the west field, Eric Herman hit what he believed to be a rock near the stone pile. The following day, while the Hermans were working in the same area, the tile plow struck the pipeline and broke it. The Hermans notified Brown, who advised them he would come to the site immediately. The Hermans then notified the Timms of the accident. Approximately 3,300 gallons of gasoline were released from the pipeline. Amoco was required to hire outside contractors to remove the gasoline, repair the pipeline, and remove the contamination from the soil. On September 28, 2000, Amoco filed this action against the Hermans and HDS seeking to recover its costs for clean up and repair as a result of the accident. Amoco filed its amended complaint on February 5, 2001, adding the Timms as defendants.

Summary Judgment Standard

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed. R.Civ.P. 56. Material facts are facts which are defined by substantive law and are necessary to apply the law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). A dispute is genuine if a reasonable jury could return judgment for the non-moving party. Id. The court must draw all inferences in a light most favorable to the non-moving party, but may grant summary judgment when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party." Agristor Financial Corp. v. Van Sickle, 967 F.2d 233, 236 (6th Cir.1992)(quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)).

Discussion

I. Motions for Summary Judgment

Amoco contends that it is entitled to summary judgment on all of its claims against all of the defendants because there is no genuine issue of material fact that under the MISS-DIG statute and the common law, all of the defendants had the duty to contact MISS-DIG and to refrain from...