Bitler Inv. Venture II v. Marathon Ashland Petrol
| Decision Date | 31 August 2009 |
| Docket Number | Cause No. 1:04-CV-477-TS. |
| Citation | 653 F.Supp.2d 895 |
| Parties | BITLER INVESTMENT VENTURE II, LLC, Bitler Investment Venture III, LLC, Bitler Investment Venture V, LLC, Bitler Investment Venture VI, LLC, Melching Investment Venture II, LLC, Melching Investment Venture III, LLC, Melching Investment Venture V, LLC, Melching Investment Venture VI, LLC, and Two Portland Properties # 1, LLC, Plaintiffs, v. MARATHON ASHLAND PETROLEUM, LLC, Speedway SuperAmerica, LLC, and Marathon Oil Company, Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
Frederick D. Emhardt, George M. Plews, J. Michael Bowman, Plews Shadley Racher & Braun, Indianapolis, IN, for Plaintiffs.
Barbara J. Meier, Hamish S. Cohen, Barnes & Thornburg LLP, Indianapolis, IN, for Defendants.
In this lawsuit, which was instituted in 2004, the Plaintiffs seek recovery under the theories of breach of contract and waste. The Defendants and/or their predecessors in interest leased several gasoline stations from the Plaintiffs and/or their predecessors in interest, and the Plaintiffs claim that the Defendants and their predecessors in interest neglected and destroyed the leased commercial properties and thereby injured the Plaintiffs' rights and interests in the properties.
In August 1994 and August 1995, the parties' predecessors in interest entered into written agreements cancelling their lease agreements involving properties in Huntington, Indiana, and Ligonier, Indiana and releasing the Plaintiffs, the Defendants, and their predecessors in interest from all claims arising out of or in connection with the leases. Almost ten years later, the Plaintiffs instituted this legal action seeking to recover damages from the Defendants for alleged breaches of contract and waste.
On July 18, 2007, the Defendants filed a Motion for Partial Summary Judgment on All Issues Regarding the Huntington Indiana Property (Counts 5 and 6) and Ligonier, Indiana Property (Counts 25 and 26) [DE 119], arguing that these claims are barred by the release agreement and the applicable statute of limitation. On September 10, the Defendants filed a Motion to Strike the Affidavit of Dr. Ravi Nagarajan [DE 159]. These motions are fully briefed and ripe for ruling.
On December 17, 2004, the Plaintiffs instituted this lawsuit. In their twentyeight count Complaint [DE 1], they name Marathon Ashland Petroleum as Defendant. On January 21, 2005, they filed an Amended Complaint [DE 17], adding Speedway SuperAmerica LLC and Marathon Oil Company as additional Defendants. The Plaintiffs premise this Court's subject-matter jurisdiction on diversity of citizenship pursuant to 28 U.S.C. § 1332.
Counts 5 and 6 of the Amended Complaint relate to commercial property in Huntington, Indiana, which is currently owned by Plaintiffs Bitler Investment Venture III and Melching Investment Venture III. Counts 25 and 26 of the Amended Complaint relate to commercial property in Ligonier, Indiana, which is currently owned by Plaintiffs Bitler Investment Venture III and Melching Investment Venture III. The Plaintiffs contend that the Defendants left these properties in a deplorable condition with remaining environmental uncertainties, that the Defendants returned the properties to the owners in a condition that was both unsaleable and untenantable at fair market rates, that the Defendants breached the commercial lease agreements, that the Defendants destroyed, misused, altered, mutilated, and damaged the properties and left them in a damaged condition, and that the Plaintiffs have suffered damages.
On February 28, 2005, the Defendants filed their Answer [DE 34], and on March 15, they filed their Amended Answer [DE 40]. On July 18, 2007, the Defendants filed their Motion for Partial Summary Judgment on All Issues Regarding the Huntington, Indiana Property (Counts 5 and 6) and Ligonier, Indiana Property (Counts 25 and 26) [DE 119], a Brief in Support [DE 120], a Submission of Evidence [DE 121] (with Exhibits), and an Appendix/Statement of Material Facts [DE 122]. On August 24, the Plaintiffs filed a Response [DE 149] and a Submission of Evidence [DE 150] (with Exhibits). On September 10, the Defendants filed a Reply [DE 161]. On September 10, the Defendants also filed a Motion to Strike the Affidavit of Dr. Ravi Nagarajan [DE 159] and Brief in Support [DE 160]. On September 28, the Plaintiffs filed a Response [DE 177], and on October 12, the Defendants filed a Reply [DE 185].
The Defendants' Motion for Partial Summary Judgment on All Issues Regarding the Huntington, Indiana Property (Counts 5 and 6) and Ligonier, Indiana Property (Counts 25 and 26) is the second in a series of summary judgment motions (seven in total) filed by the Defendants that together seek summary judgment on each of the claims asserted by the Plaintiffs. The Defendants have also filed a series of motions in limine and motions to strike. This Opinion and Order addresses only the second of these summary judgment motions and one of the motions to strike filed by the Defendants.
The Federal Rules of Civil Procedure provide that motions for summary judgment should be granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists when "`there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.'" AA Sales & Assocs. v. Coni-Seal, Inc., 550 F.3d 605, 608-09 (7th Cir.2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Under Rule 56(e)(2), a party opposing a properly made and supported motion for summary judgment "may not rely merely on allegations or denials in its own pleading; rather its response must—by affidavits or as otherwise provided in this rule—set out specific facts showing a genuine issue for trial." If appropriate, summary judgment should be entered against a party who fails to so respond. Fed. R.Civ.P. 56(e)(2); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (). A court's role on summary judgment is not to weigh the evidence, make credibility determinations, or decide which inferences to draw from the facts, but instead to determine whether there is a genuine issue of triable fact. Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Washington v. Haupert, 481 F.3d 543, 550 (7th Cir.2007); Payne v. Pauley, 337 F.3d 767, 770 (7th Cir.2003). Thus, a court in ruling on a summary judgment motion construes all facts in the light most favorable to the nonmoving party and draws all reasonable inferences in that party's favor. AA Sales & Assocs., 550 F.3d at 609.
On December 1, 1965, George O. and Mary Eleanor Bitler and Max E. and J. Maxine Melching entered into a lease agreement entitled "Indenture of Lease" with Colonial Oil Company, Inc., involving the subject property in Ligonier, Indiana, which the Bitlers and the Melchings owned. On August 1, 1975, George O. Bitler and Max E. Melching entered into a lease agreement entitled "Indenture of Lease" with Colonial Oil Company, Inc., involving the subject property in Huntington, Indiana, which Mr. Bitler and Mr. Melching owned. At times during this period, George Bitler and Max Melching were officers of Colonial Oil Company. At some point, which is not critically important to the present issues in this case, Rock Island Refining Company acquired Colonial Oil Company, and eventually Marathon Oil Company acquired Rock Island Refining Corporation and its wholly-owned subsidiary or affiliate R.I. Marketing Company, Inc. The Huntington and Ligonier properties were used as retail gasoline stations.
On October 27, 1983, George O. Bitler and Max E. Melching entered into separate lease agreements both entitled "Indenture of Lease" with R.I. Marketing, Inc., involving the Huntington and Ligonier properties. These leases were for terms of eleven-years, running from December 1, 1983, to November 30, 1994, and included renewal options. Both leases included the following term regarding use of the leased premises: "During the lease term, the Lessee shall use the leased premises in a careful and proper manner and for lawful purposes only, and shall, at its own expense, comply with any and all applicable statutes, ordinances, rules and regulations relating to the occupancy or use of the leased premises ...." (Second Gilbert Aff., Ex. A-4 at 4 and Ex. A-5 at 4.) Within several months of executing these agreements, Mr. Bitler and Mr Melching met with William Gilbert, an employee and representative of Marathon Oil Company and Marathon Petroleum Company who managed real estate and leases in the region during the relevant period. Mr. Bitler and Mr. Melching informed Mr. Gilbert that Mr. Melching would be the primary contact person regarding the Huntington and Ligonier properties. In July 1989, Marathon Oil Company (then known as Marathon Petroleum Company) acquired Rock Island Refining Corporation and R.I. Marketing, and Emro Marketing Company (a wholly-owned subsidiary of Marathon Petroleum Company) eventually acquired the leases on the Huntington and Ligonier properties.
New federal regulations governing underground storage tanks used to store gasoline and other petroleum products were promulgated in the late 1980s. These regulations...
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