Canadyne-Georgia Corp. v. Bank of America

• Decision Date: 13 August 2001
• Docket Number: No. 5:96-CV-114-1 (DF).,5:96-CV-114-1 (DF).
• Parties: CANADYNE-GEORGIA, CORPORATION, Plaintiff, v. BANK OF AMERICA, et al., Defendants.
• Court: U.S. District Court — Middle District of Georgia

174 F.Supp.2d 1360

CANADYNE-GEORGIA, CORPORATION, Plaintiff, v. BANK OF AMERICA, et al., Defendants.

No. 5:96-CV-114-1 (DF).

United States District Court, M.D. Georgia, Macon Division.

August 13, 2001.

COPYRIGHT MATERIAL OMITTED

Roger Allen Chalmers, John Clay Spinrad, Atlanta, GA, Walter H. Bush, Jr., Macon, GA, for plaintiff.

Michele L. Davis, Atlanta, GA, Hugh Brown McNatt, Vidalia, GA, Allen E. Lockerman, IV, David A. Sapp, Atlanta, GA, Mara McRae, Richard A. Horder, Valerie A. Nowell, W. Scott Laseter, Atlanta, GA, Douglas Sheppard Arnold, E. Peyton Nunez, Nill Toulme, Alston & Bird, Atlanta, GA, for defendants.

ORDER

FITZPATRICK, District Judge.

This case is an action for declaratory and monetary relief pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C.A. § 9601 et seq. (West 1995 & Supp.2001); the Declaratory Judgment Act, 28 U.S.C.A. § 2201 et seq. (West 1994); the Georgia Hazardous Site Response Act ("HSRA"), O.C.G.A. § 12-8-90 et seq. (2001); and Georgia common law. The case is presently before the Court on Defendant Bank of America, N.A.'s (the "Bank") motion for summary judgment (tab # 215).

I. Facts

From 1945 until 1972, the Fulton National Bank of America, now known as Bank of America, N.A., served as co-executor and later as co-trustee of the J.W. Woolfolk Trust. The assets of the Woolfolk Trust included a general partnership interest in Woolfolk Chemical Works, Ltd., ("WCW, Ltd."), a partnership that operated the Woolfolk pesticide manufacturing and formulating facility in Fort Valley, Georgia. During this time period, two independent partnerships operated the facility: WCW, Ltd. II, which was formed in 1945 and WCW, Ltd. III, which was formed in 1957. In 1977, Woolfolk Chemical Works, Inc. was sold in a stock transaction and its name became Canadyne-Georgia Corporation, the plaintiff in this action. On August 7, 1996, the bank resigned as trustee of the Woolfolk Trust and delivered the trust assets to new trustees.

Since 1990, under orders issued by the United States Environmental Protection Agency ("EPA"), Plaintiff has spent millions of dollars cleaning up contamination at the facility and in surrounding areas. In addition, Plaintiff has defended and resolved lawsuits filed by current and former residents of Fort Valley, Georgia, in which the residents claimed injury from hazardous substances released at the facility (the "Toxic Tort Litigation"). Plaintiff has brought this action seeking to hold the Bank and other allegedly responsible parties liable for costs that it has incurred.

The Bank previously moved to dismiss Plaintiff's claims under Rule 12(b)(6). The Eleventh Circuit reversed the Court's grant of that motion and reinstated all of Plaintiff's claims. See Canadyne-Georgia Corp. v. NationsBank, N.A. (South), 183 F.3d 1269 (11th Cir.1999). The Eleventh Circuit first noted that the Bank was an "owner" of the facility under Georgia law and for purposes of § 107(a) of CERCLA. Id. at 1273; see also 42 U.S.C.A. § 9607(a)(2) (imposing 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"). The Eleventh Circuit next addressed the protections afforded fiduciaries from personal liability under the Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996 (the "Asset Conservation Act"), 42 U.S.C.A. § 9607(n). Plaintiff asserted the applicability of the exception found in § 2502(n)(3) of the Asset Conservation Act.¹ Because of this negligence exception, the Eleventh Circuit denied the motion to dismiss, finding that Plaintiff had sufficiently alleged facts stating a claim under CERCLA. Canadyne-Georgia Corp., 183 F.3d at 1276. In so doing, however, the Eleventh Circuit noted that "[t]o gain the benefit of the negligence exception, Canadyne must present evidence that the Bank took particular negligent actions that caused or contributed to the release of hazardous substances. Here, the negligence exception requires some action because the Bank had no duty to prevent someone else from releasing hazardous substances." Id. at 1275. It is in this posture that the Court now addresses the Bank's motion for summary judgment.

II. Summary Judgment Standard

Summary judgment is appropriate when "there is no genuine issue as to any material fact ... and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Edwards v. Shalala, 64 F.3d 601, 603 (11th Cir.1995). If the moving party demonstrates that there is "an absence of evidence to support the non-moving party's case," the burden shifts to the non-moving party to go beyond the pleadings and present specific evidence giving rise to a triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991).

In reviewing a motion for summary judgment, the court must construe the evidence and all inferences drawn from the evidence in the light most favorable to the non-moving party. See Maynard v. Williams, 72 F.3d 848, 851 (11th Cir.1996). Even if there exists some alleged factual dispute between the parties, summary judgment is not necessarily improper; there must be a genuine issue of material fact to render summary judgment improper. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. Legal Analysis

Canadyne's claims are brought against the Bank in its individual capacity for liability incurred in its fiduciary role as trustee and executor of the J.W. Woolfolk Trust.² The Bank has moved for summary judgment on all claims.

A. Comprehensive Environmental Response, Compensation, and Liability Act of 1980

Count I of Plaintiff's complaint is a claim for cost recovery under § 107(a) of CERCLA. Because Plaintiff is itself a responsible party under § 107, see Canadyne-Georgia Corp. v. Cleveland, 72 F.Supp.2d 1373, 1376 (M.D.Ga.1999), it is limited to a claim for contribution under § 113(f). See Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1513 (11th Cir.1996) ("[W]hen one liable party sues another liable party under CERCLA, the action is not a cost recovery action under § 107(a). Rather it is a claim for contribution under § 113(f)."). Accordingly, the Bank's motion for summary judgment on Count I, Plaintiff's claim for cost recovery under § 107(a), is GRANTED.

To succeed on Count II, Plaintiff's § 113(f) contribution claim against the Bank, Plaintiff must present evidence showing that the exception in § 2502(a)(3) of the Asset Conservation Act is applicable here and removes personal liability protection from the Bank. As noted by the Eleventh Circuit, "[t]o gain the benefit of the negligence exception, Canadyne must present evidence that the Bank took particular negligent actions that caused or contributed to the release of hazardous substances." Canadyne-Georgia Corp., 183 F.3d at 1275. The Bank has presented evidence showing that it did not take any negligent actions causing a release or threatened release of a hazardous substance. Plaintiff has not presented any affirmative evidence rebutting the Bank's evidence or showing that the Bank took negligent action. Instead, Plaintiff argues that the Bank is liable under CERCLA because of its breach of "affirmative duties under Georgia statutory and common law to prevent pollution at the Site." Plaintiff admits that it raised these arguments before the Eleventh Circuit, but claims that the "Eleventh Circuit elected not to decide whether evidence of passive negligence arising from duties under state common law or statutory law will be sufficient to invoke the negligence exception under the Asset Conservation Act." The Bank responds that the Eleventh Circuit addressed this issue and implicitly dismissed Plaintiff's argument that it had a duty to prevent others from releasing hazardous substances based on Georgia common or statutory law. The Bank points out that the Eleventh Circuit specifically asked the parties to brief the issue of whether it "had a duty not to release or allow the release of hazardous substances into the environment at the Facility." The Bank concludes that under the law-of-the-case doctrine, it had no duty to prevent someone else from releasing a hazardous substance. The Court has studied Plaintiff's arguments and notes that they are identical to the ones raised before the Eleventh Circuit. In discussing this issue, the Eleventh Circuit stated, "Here, the negligence exception requires some action because the Bank had no duty to prevent someone else from releasing hazardous substances. Canadyne has mentioned only one possible source of the Bank's duty to prevent others from releasing hazardous substances: CERCLA." Id. (emphasis added). The Court believes that this language reflects that the Eleventh Circuit considered and implicitly rejected Plaintiff's argument that Georgia common law and statutory law imposed such a duty. The law-of-the-case doctrine applies not only to matters decided explicitly, but also to matters decided by necessary implication. See Aldridge v. Lily-Tulip, Inc., 40 F.3d 1202, 1207 (11th Cir. 1994). Thus, based on the law-of-the-case doctrine, the Court concludes that Plaintiff's argument that the Bank breached a duty, arising out of Georgia common law and statutory law, to prevent the release of hazardous substances by others lacks merit.³

Plaintiff also argues that the Bank is indirectly liable under CERCLA because of its status as a general partner in the Woolfolk Partnerships.⁴ Plaintiff contends that based on Georgia partnership law, the Bank should be held indirectly liable under CERCLA for the liabilities of the partnership, WCW, Ltd. III, and general partner T.W. Cleveland. The Bank responds that Plaintiff's argument lacks merit as the Eleventh Circuit...