Bell v. Kokosing Indus., Inc.

Decision Date22 July 2020
Docket NumberCIVIL ACTION NO. 19-53-DLB-CJS
CourtU.S. District Court — Eastern District of Kentucky
MEMORANDUM OPINION AND ORDER* * * * * * * * * * * * * * * *

This matter is before the court on several motions to dismiss filed by the various defendants; including Defendant Kokosing Industrial, Inc.'s Motion to Dismiss (Doc. # 38), Defendant City of Cincinnati's Motion to Dismiss (Doc. # 40), Defendant Metropolitan Sewer District of Greater Cincinnati's Motion to Dismiss (Doc. # 41), Defendant ATC Group Services LLC's Motion to Dismiss (Doc. # 42), and Defendant Ashcraft Sand & Gravel Co., Inc.'s Motion to Dismiss (Doc. # 37). Each motion has been fully briefed, (Docs. # 49, 50, 54, 55, 56, 57, 58), and are all now ripe for the Court's review.

For the reasons stated herein, Defendant Kokosing's Motion to Dismiss is granted in part and denied in part, Defendant City of Cincinnati's Motion to Dismiss is granted, Defendant Metropolitan Sewer District of Greater Cincinnati's Motion to Dismiss is granted, Defendant ATC Group Services LLC's Motion to Dismiss is granted, and Defendant Ashcraft Sand & Gravel Co., Inc.'s Motion to Dismiss is granted.


In June of 2017, Defendants City of Cincinnati ("the City")—as manager and operator of Defendant Metropolitan Sewer District of Greater Cincinnati ("MSD")1—and Kokosing Industrial, Inc. ("Kokosing") entered into a construction contract, the Lick Run Valley Conveyance System Project (the "Lick Run project"), to repair an outdated sewer system in Cincinnati. (Doc. # 27 at ¶¶ 2, 10-11). Kokosing served as the general contractor for the project. Id. at ¶ 10. The Lick Run project was a multi-million-dollar undertaking and involved a substantial amount of excavation work. Id. at ¶¶ 10, 21, 22. Defendant Ashcraft Sand & Gravel Company, Inc. ("Ashcraft") was hired to transport soil that was excavated from the Lick Run project. Id. at ¶ 6.

Much of the area that needed to be excavated was formerly used for industrial work; given its industrial history, there was a concern that the excavated soil may contain pollutants and heavy metals. Id. at ¶¶ 15-16. In order to comply with environmental regulations and identify potential contaminated soil, the City hired Defendant ATC Group Services LLC ("ATC") as an environmental consultant. Id. at ¶ 17. ATC "was required to test suspect material encountered during construction activities" and "classify suspect material . . . as either 'contaminated' or 'non-contaminated.'" Id. at ¶¶ 18-19. Kokosing did not have its own procedure for testing and identifying contaminated soil; it relied on the testing from ATC. Id. at ¶ 36. If a Kokosing employee suspected that excavated material was contaminated because of its odor or appearance, the employee wasinstructed to suspend work and notify ATC so additional testing could be done. Id. at ¶¶ 38-40.

Under its contract with the City, Kokosing was paid a lump sum for excavating uncontaminated fill material and depositing it at residential properties where it could be used as fill material. Id. at ¶ 24. Contaminated soil had to be taken to a landfill to be safely disposed of at the City's expense. Id. at ¶¶ 19, 24. If soil was deposited at a residential property but it was later discovered to be contaminated, Kokosing had to remove the contaminated soil and take it to a landfill, again at the City's expense. Id. at ¶ 42.

Plaintiffs Cindy and David Bell live at one of the residential properties where Kokosing deposited fill material from the Lick Run project. Id. at ¶ 1. Cindy Bell holds fee simple title to the property. Id. at ¶ 46. The Bells' property is in Villa Hills, Kenton County, Kentucky; a portion of the Bells' boundary line slopes sharply downward toward the Ohio River and is located within the floodplain. Id. at ¶ 45. The Bells obtained a floodplain permit to place "inert, non-contaminated fill material on their property" in order to level out the slope down toward the river. Id. at ¶ 47. While the Bells' property is currently too small to be subdivided under the current zoning regulations in Villa Hills, they argue that in the future, their property could be subdivided into multiple residential lots if the zoning regulations were amended and, presumably, if the sloped elevation was raised. Id. at ¶ 49. Alternatively, the Bells claim that after their property is leveled, they plan on creating "a small campground overlooking a scenic bend in the Ohio River and an organic garden for the use and benefit of their family and members of their church"; they also wish to build a boat ramp down to the Ohio River to be used by the people at the campground.Id. at ¶¶ 51-52. The Bells insist that they do not intend to use the future campground for commercial purposes. Id. at ¶ 51.

In July of 2017, Kokosing approached the Bells and offered to "transport and deliver as much as 100,000 cubic yards of clean, inert, and non-contaminated fill material to their residential property at no cost to Plaintiffs." Id. at ¶ 59. The Bells agreed; they said they would "take as much clean, non-contaminated fill, as needed to raise their property out of the floodplain." Id. A Kokosing representative inspected the Bells property and verified that they had the necessary permit to accept the fill material. Id. at ¶¶ 61-64. Kokosing allegedly told the Bells that the City, MSD, and ATC would each need to inspect the Bells' permits "to approve this potential dumping site before Kokosing could sign a contract with Plaintiffs and begin to place clean fill material on their property." Id. at ¶ 64; see also id. at ¶ 70 ("The City, ATC, and MSD each reviewed Kokosing's contract with Plaintiffs, the Plaintiffs' floodplain permit, and the commercial driveway permit for Plaintiffs' property issued by the Kentucky Division of Transportation.").

The Bells allege that Kokosing told them that they did not need legal representation during contract negotiations. Id. at ¶ 73. The Bells claim that "[a]s an inducement to get Plaintiffs to sign the contract, Kokosing's representatives and agents, including Ashcraft employees, promised . . . the elevated yard would be out of the floodplain, level, stable, and in compliance with their floodplain permit." Id. at ¶ 74. The Bells also claim that Kokosing promised that once the lot was level and compacted it "would be suitable for use by their family and members of their church as a camp site." Id. at ¶ 76. These alleged representations were made "in mid-July 2017." Id. at ¶¶ 74-77.

In mid-July of 2017, David Bell and Kokosing signed a contract (the "Waste Agreement") which allowed for the deposit of uncontaminated fill material from the Lick Run project on the Bells' property.2 Id. at ¶¶ 73-110. The Bells argue that the Waste Agreement was a form contract that Kokosing also used with other residential property owners. See id. at ¶ 79. Specifically, the Waste Agreement gives Kokosing "the right to ingress and egress from [the Bells' property] . . . and the right to deposit waste material" on the property. (Doc. # 27-2 at 1) (the Waste Agreement). "Waste materials" was defined as "dirt, earth, rock, concrete subsurface and other material . . . from a construction project;" none of the waste material should have contained "any contaminants as defined by state and/or federal law." Id. at 1-2. The Waste Agreement also states that Kokosing will indemnify the Bells for any "losses, liabilities, costs, expenses, suits, actions, claims, and all other obligations and proceedings . . . arising out of injuries to persons . . . or damage to property caused by [Kokosing]" except those arising out of the Bells' negligence. Id. at 3. David Bell claims that he modified several sections in the Waste Agreement, including striking out certain language in Sections 1, 2, 5, 7, 10, 11, 12, and 17 and adding the phrase "no contaminated material of any type" to Section 5. (Doc. # 27 at ¶ 88). The Bells claim that a Kokosing representative told Mr. Bell to sign the contract and then send it to the Kokosing headquarters where a Kokosing representative would also sign. Id. at ¶ 84. Mr. Bell signed the contract; he did not keep a copy for himself.3 Id. at ¶ 89.

In August 2017, Kokosing and Defendant Ashcraft began shipping fill material from the Lick Run project to the Bells' property. Id. at ¶ 104. The Bells claim that between "the beginning date in August 2017 and until September 29, 2017, Defendant Ashcraft, acting for and as the actual or ostensible agent of all the named Defendants, transported approximately 1,393 loads of fill material to Plaintiffs' property." Id. The fill material placed on their property "was not sampled or tested by Kokosing, the City, MSD, ATC, or Ashcraft before being dumped and spread on Plaintiffs' property." Id. at ¶ 106. The Bells claim that despite multiple requests, Kokosing and Ashcraft refused to provide the Bells with documentation for where the fill material was coming from at the Lick Run project or verification that the fill material was free of contaminants. Id. at ¶ 109.

On September 29, 2017, Kokosing started depositing additional fill material onto the Bells' property that was excavated from a location within the Lick Run project known as CSA 20. Id. at ¶ 111. CSA 20 included a former McDonald's restaurant located at 2321 Beekman Street, which the City purchased in 2015. Id. at ¶ 112. According the Bells, the City, MSD, and ATC knew or should have known that the fill material at the McDonalds site contained "black foundry sand contaminated with heavy metals and polyaromatic hydrocarbons." Id. at ¶ 113. The Bells allege that the City was informed multiple times beginning in 2002 that the soil at 2321 Beekman Street was likely contaminated. Id. at ¶¶ 121-30. The Bells also claim that the "black sand was patently obvious" and "had a petroleum...

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