Canadyne-Georgia Corp. v. Cleveland, 5:96-CV-114-1 DF.

Decision Date30 September 1999
Docket NumberNo. 5:96-CV-114-1 DF.,5:96-CV-114-1 DF.
PartiesCANADYNE-GEORGIA CORPORATION, Plaintiff, v. Mr. Thomas W. CLEVELAND; Mr. John H. Thurman; the J.W. Woolfolk Trust; Woolfolk Chemical Works, Ltd.; Ms. Rachel Mathes, Mr. Thomas W. Cleveland, Jr. and Mr. John W. Moye, in their capacity as current Co-Trustees of the J.W. Woolfolk Trust, Defendants.
CourtU.S. District Court — Middle District of Georgia

Walter H. Bush, Jr., Macon, GA, John Clay Spinrad, Atlanta, GA, for Canadyne-Georgia Corporation, plaintiff.

Russell Wayne Thorpe, Alston & Bird, Atlanta, GA, Laurin McCallum McSwain, Atlanta, GA, for Nationsbank, N.A. (South), defendant.

Michele L. Davis, Atlanta, GA, for J.W. Woolfolk Trust, defendant.

Mara McRae, Richard A. Horder, Lisa G. Youngblood, Atlanta, GA, for Woolfolk Chemical Works, Ltd., defendant.

Lisa G. Youngblood, David A. Sapp, Atlanta, GA, for Thomas W. Cleveland, defendant.

David A. Sapp, Atlanta GA, for John W. Moye, Rachel Mathes defendants.

Lisa G. Youngblood, Atlanta, GA, for John H. Thurmand, defendant.

Ligia Patricia Arias, Ms., Atlanta, GA, for Estate Executors for Thomas Cleveland, defendant.

FITZPATRICK, Chief Judge.

Plaintiff, Canadyne-Georgia Corporation (Canadyne), filed this suit under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 et seq., claiming that the Defendants should be required to contribute funds for cleanup costs incurred by Canadyne as a result of a mandate issued by the Equal Protection Agency (EPA). Defendants, Woolfolk Chemical Works Limited (WCW), and the J.W. Woolfolk Trust (the Woolfolk Trust) have now moved for summary judgment pursuant to Rule 56 of the FRCP. For the reasons discussed below, that motion is hereby denied.

FACTUAL BACKGROUND

For a number of years, the Defendant, WCW, operated a facility that manufactured pesticides in Fort Valley, Georgia. The history of the Fort Valley facility goes back over 80 years. The facility, which was used throughout its history to make pesticides, was originally founded as a proprietorship by J.W. Woolfolk. In 1925, the J.W. Woolfolk Corp. was formed, and it ran the facility until 1941. After the corporation's dissolution in 1941, the facility was transformed into a limited partnership, Woolfolk Chemical Works Ltd. (WCW). WCW was "reincarnated" as a limited partnership on three separate occasions. In 1972, however, WCW incorporated, and as part of this incorporation, it sold all assets to the newly formed Woolfolk Corp. No Certificate of dissolution was ever filed by WCW after the 1972 incorporation.

Five years later, in 1977, Woolfolk Corp. was purchased by a corporate affiliate of Canadyne and renamed Canadnye-Georgia Corp. Canadnye continued to engage in the manufacture of pesticides until 1984, when it sold the pesticide business and most of its assets to another party. This suit is the outgrowth of an action originally brought by the EPA. Between 1990 and 1995, the EPA issued several orders commanding Canadyne to address contamination at its facility in Fort Valley, Georgia. Among other things, Canadyne was instructed to relocate residents living near the plant, remove contaminated soil from the area, and purify the ground water at the plant. Following the directives of the EPA and the Georgia Environmental Protection Division, Canadyne has spent millions of dollars during the 1990s cleaning up the polluted facility. In this suit, Canadyne seeks to recover some of the costs of this cleanup operation from other potentially responsible parties.

STANDARD OF REVIEW

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.Proc. 56(c); Lordmann Enterprises, Inc. v. Equicor, Inc., 32 F.3d 1529, 1532 (11th Cir.1994). 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 nonmoving 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, 2554, 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. WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir.1988). 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. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

LEGAL CONCLUSIONS

CERCLA was passed by Congress in 1980 in response to the many problems created by the release of hazardous substances into the environment. An "essential purpose" of CERCLA is to make "those responsible for problems caused by the disposal of chemical poisons bear the costs and responsibility for remedying the harmful conditions they created." Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir. 1986). In furtherance of this end, CERCLA imposes strict liability on four classes of people for any cleanup costs necessitated by the release or threatened release of hazardous substances. Those covered by the statute include:

1) the owner and operator of a vessel or a facility,

2) 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,

3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and

4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance.

42 U.S.C. § 9607(a) (Emphasis added).

In order to hold responsible parties liable for the cleanup of hazardous waste, CERCLA provides two separate means of recovery, the availability of which depends on the status of the person seeking to be compensated for the cleanup costs. An "innocent" party — one that is neither responsible nor potentially responsible for cleanup costs under § 107 of the statute — can bring an action to recover cleanup costs directly under § 107. See Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1513 (11th Cir.1996). A government entity, for instance, may recover any cleanup costs it has incurred in cleaning up a hazardous site. And, in bringing a recovery action under § 107, an innocent party can often hold a responsible party jointly and severally liable for any cleanup costs incurred.1

In contrast to an innocent party, a party that is responsible or potentially responsible for cleanup costs under § 107 is limited to bringing an action for equitable contribution under § 113(f).2 See Redwing Carriers, 94 F.3d at 1513; see also United States v. Colorado & E.R. Co., 50 F.3d 1530, 1535-36 (10th Cir.1995); Amoco Oil Co. v. Borden Inc., 889 F.2d 664, 672 (5th Cir.1989); United Technologies Corp. v. Browning-Ferris Indus., 33 F.3d 96, 99-100 (1st Cir.1994); Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir. 1994). In many cases, the fact that a party is limited to bringing a claim for contribution will not have a significant impact on the outcome of a case. There are, however, differences between a cost recovery action under § 107 and a claim for contribution under § 113(f) that can be important in some cases.3

In the instant case, Plaintiff concedes that it is a responsible party under § 107. In fact, the purpose of Plaintiff's suit is to recover cleanup costs it incurred as a result of an action brought by the EPA under § 107. Consequently, to the extent Plaintiff can recover here, its claim is one for contribution under § 113(f). Plaintiff contends that the Defendants should be forced to contribute a share of Plaintiff's cleanup costs since the partnership released hazardous chemicals onto the property now owned by Canadyne during WCW's period of ownership. While Defendants dispute the nature and quantity of the pollution they are allegedly responsible for, they conceded in oral argument that some discharges were made during the time in which WCW owned the facility. Nonetheless, Defendants claim that any liability WCW had for environmental damage was assumed by the Plaintiff when the partnership assets were sold to the Woolfolk Corporation (later renamed Canadyne) in 1972. Moreover, because Defendants contend that the limited partnership dissolved and distributed its assets, they argue that WCW is no longer a "person" that can be sued under CERCLA. Accordingly, Defendants do not believe that they should have to contribute anything under § 113(f). The Court will address each of the Defendants' contentions in turn.

A. Did the Defendant Transfer Its Liability to the Plaintiff When It Sold the Partnership Assets to the Plaintiff?

A party cannot altogether escape its liability under CERCLA by means of an agreement with another party. See 42 U.S.C. § 9607(e)(1). For instance, if a buyer of real property assumes all CERCLA liability in a contract with the seller, that promise will not prevent an innocent third party, such as a government agency, from holding the seller liable in cost recovery action brought under CERCLA. On the other hand, two responsible parties can allocate CERCLA liability among themselves. See United...

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