AVX Corp. v. HORRY LAND CO., INC.
| Citation | 686 F. Supp.2d 621 |
| Decision Date | 22 February 2010 |
| Docket Number | Civil Action No.: 4:07-3299. |
| Parties | AVX CORPORATION, Plaintiff, v. HORRY LAND COMPANY, INC. and the United States of America, Defendant. |
| Court | U.S. District Court — District of South Carolina |
Kevin A. Dunlap, Parker Poe Adams and Bernstein, Spartanburg, SC, Steven D. Weber, Parker Poe Adams and Bernstein, Charlotte, NC, for Plaintiff.
Carrie Appleton Fox, Saunders M. Bridges, Jr., Aiken Bridges Law Firm, Florence, SC, Charles Bernhart Jordan, Jr., Thompson and Henry, John Jackson Thomas, Thompson Law Firm, Myrtle Beach, SC, Raymond Emery Clark, U.S. Attorneys Office, Columbia, SC, Meredith R. Weinberg, U.S. Department of Justice, Washington, DC, for Defendant.
The plaintiff, AVX Corporation ("AVX") filed this action on October 2, 2007 against Horry Land Company, Inc. ("Horry Land"). (Doc. # 1). AVX filed its amended complaint on April 3, 2009, which added the United States of America as a defendant. (Doc. # 65). On April 13, 2009, Horry Land filed its Answer with the inclusion of five counterclaims. (Doc. # 72). On May 27, 2009, AVX filed a Motion for Summary Judgment to dismiss all counterclaims alleged by the defendant Horry Land. (Doc. # 81). On July 13, 2009, Horry Land filed its Response in Opposition to Plaintiff's Motion for Summary Judgment. (Doc. # 95). Plaintiff AVX filed its Reply to Horry Land's Response on August 18, 2009. (Doc. # 103). This Court held a hearing on the matter on January 5, 2010.1 (Doc. # 123). The Court has carefully considered the motions, memoranda, and exhibits submitted by the parties, as well as the arguments presented at the hearing. The Court has determined the relevant facts from the record presented by the parties, and drawn all reasonable factual inferences in favor of the non-moving party.
The matter before the Court concerns only the counterclaims brought by Horry Land against AVX. Therefore, the factual summary herein reflects only those facts relevant to the adjudication of the Motion for Summary Judgment.
At the heart of this suit is the allegation by Horry Land that its real estate has diminished in value as a result of contamination caused by AVX. Horry Land is a company operating primarily in the Myrtle Beach area. It owns a tract of land approximately 30 acres in size, located across 17th Avenue South from property owned by AVX. AVX is a manufacturer and supplier of electronic components, including the production of ceramic capacitors. The company's principal executive offices as well as a manufacturing facility are located at 17th Avenue South, Myrtle Beach, South Carolina. As a part of its manufacturing process, AVX previously employed the use of volatile organic compounds ("VOCs") including trichloroethene ("TCE"). Additionally, AVX previously stored TCE in storage tanks on its property in Myrtle Beach. Some time thereafter, AVX underwent remediation efforts which included soil excavation at the Myrtle Beach facility.
Horry Land previously leased a portion of its property to AVX. While under lease, AVX used Horry Land's property to temporarily store soils on an area of the property that served as the employee parking lot. Horry Land asserts that sometime in 2006, after the expiration of the lease, it ordered a Phase I environmental study for the property. It further alleges that, because of what was uncovered from the Phase I study, Horry Land ordered a limited Phase II environmental study for the portion of its property located closest to the AVX facility. Horry Land states that ground water samples revealed TCE concentrations as high as 1,010 parts per billion, greatly in excess of the maximum containment level of five parts per billion.
In the summer of 2007, Horry Land had an appraiser assess the value of Horry Land's property. The appraiser concluded that the loss of value to the property based upon its contaminated state was approximately $5,375,000, or the entire value of the property. Horry Land notes that this loss only refers to the contaminated portion of the property, which is approximately two-thirds of the property in its entirety.
Subsequently, Horry Land made a demand through counsel that AVX pay for the damage to its real estate resulting from its contamination. The demand was refused. In the case at hand, Horry Land has alleged five causes of action as counterclaims in its Answer: negligence, negligence per se, strict liability, nuisance, and trespass. Horry Land also seeks punitive damages.
Pursuant to Federal Rule of Civil Procedure 56(c), the moving party is entitled to summary judgment if the pleadings, responses to discovery, and the record reveal that "there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). As the party seeking summary judgment, the counter-defendant AVX bears the initial responsibility of informing this Court of the basis for its motion. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This requires the counter-defendant to identify those portions of the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of genuine issues of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548; see also Anderson, 477 U.S. at 249, 106 S.Ct. 2505.
Though the counter-defendant bears this initial responsibility, the counter-claimant, as nonmoving party, must then produce "specific facts showing that there is a genuine issue for trial." Fed R. Civ. P. 56(e); see Celotex, 477 U.S. at 317, 106 S.Ct. 2548. In satisfying this burden, the counter-claimant must offer more than a mere "scintilla of evidence" that a genuine issue of material fact exists, Anderson, 477 U.S. at 252, 106 S.Ct. 2505, or that there is "some metaphysical doubt" as to material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, the counter-claimant must produce evidence on which a jury could reasonably find in its favor. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
In considering the counter-defendant AVX's motion for summary judgment, this Court construes all facts and reasonable inferences in a light most favorable to the counter-claimant Horry Land as the nonmoving party. See Miltier v. Beorn, 896 F.2d 848 (4th Cir.1990). Summary judgment is proper "where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there being no genuine issue for trial." Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (1986) (internal quotations omitted).
AVX asserts that it is entitled to summary judgment first based upon its allegation that "essential to any claim is the fact of damage and Horry Land cannot show cognizable damages." (Pl. Mot. Summ. J. at p. 1). AVX also attacks each cause of action independently, asserting that some element is lacking from each claim.
AVX asserts that summary judgment should be granted because Horry Land has failed to produce evidence of recoverable damages as to any of its claims. AVX first alleges that Horry Land's property can be cleaned up in a fixed period of time, and therefore any damages are temporary in nature. AVX next asserts that when injury to property is temporary, the appropriate measure of damages is the loss of use and not diminution in property value. See Gray v. Southern Facilities, Inc., 256 S.C. 558, 183 S.E.2d 438, 443 (1971). AVX asserts that Horry Land has not lost any rental income, will not lose any revenue in the future, and has not made any attempts to sell the property in question. It also asserts that any attempt by Horry Land to put a dollar figure on their loss would be mere speculation. Therefore, assessing potential damages under a "loss of use" theory, AVX concludes that Horry Land has suffered no damages because it has suffered no loss of use.
AVX next makes the argument that any attempt to recover under a theory of "stigma damages" should be dismissed. First, AVX argues that if stigma damages are recoverable they are effectively a recovery for diminution in value. As mentioned, AVX has asserted that Horry Land cannot recover diminution in value because Horry Land's damages are limited to loss of use. Therefore, stigma damages would not be appropriate where the injury is temporary in nature. Second, AVX alleges that stigma damages are not recoverable under South Carolina law. It cites to Gray and states that the court recognized the general rule at the time2 of disfavoring the award of "reputation" damages and that at the time the Gray opinion was written, very few cases had considered the idea. Id. AVX notes that the court in Gray ultimately determined that it did not need to rule on the issue of reputation damages. Id. However, AVX asserts that Gray should serve as a stern warning against extending South Carolina law to include stigma damages.
This Court first considers AVX's assertion that Horry Land's damages must be considered temporary in nature as a matter of law. As evidence that the property can be cleaned up in a fixed period of time, AVX puts forth the testimony of Mark Hanish. Mark Hanish is a senior geologist with the company ARCADIS and is the project manager for the AVX Myrtle Beach environmental investigation and remediation project. . Mr. Hanish states that it is his opinion that the TCE in the groundwater below Horry Land's property can be remediated in a fixed period of time. Id. No time frame was given in Mr. Hanish's original Declaration. However, in...
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