City of Detroit v. AW Miller, Inc.

• Decision Date: 28 January 1994
• Docket Number: No. 93-72939.,93-72939.
• Citation: 842 F. Supp. 957
• Parties: CITY OF DETROIT, Plaintiff, v. A.W. MILLER, INC., Colonial Chemical, Absorbent Sales, Inc., Raymond Industries & Equipment Sales, Inc., American Mechanics, Inc., World Computer Works, Wald Co. d/b/a Maintenance Coating, Inc., Mar-Vel Sheet Metal, Inc., M & L Auto Sales, Inc., Diamond Chemical Co., Conner Welding, Inc., Duall-Sorber Products Co., and Detroit Flat Polishing (Division of Inland Steel), jointly and severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

842 F. Supp. 957

CITY OF DETROIT, Plaintiff, v. A.W. MILLER, INC., Colonial Chemical, Absorbent Sales, Inc., Raymond Industries & Equipment Sales, Inc., American Mechanics, Inc., World Computer Works, Wald Co. d/b/a Maintenance Coating, Inc., Mar-Vel Sheet Metal, Inc., M & L Auto Sales, Inc., Diamond Chemical Co., Conner Welding, Inc., Duall-Sorber Products Co., and Detroit Flat Polishing (Division of Inland Steel), jointly and severally, Defendants.

No. 93-72939.

United States District Court, E.D. Michigan, S.D.

January 28, 1994.

Richard D. Connors, Carrie G. Barrett, Plunkett & Cooney, Detroit, MI, for plaintiff.

Thomas M. Fallucca, Glenn R. Matecun, Ufer, Spaniola, Bloomfield Hills, MI, for A.W. Miller Inc.

Saulius K. Mikalonis, Sommers, Schwartz, Silver & Schwartz, P.C., Southfield, MI, for Colonial Chem.

Timothy J. Lozen, Freeman McKenzie, Mount Clemens, MI, for Wald Company.

David M. Caplan, Southfield, MI, for Mar-Vel Sheet Metal, Inc. Stanley M. Weingarden, Partovich & Weingarden, Farmington Hills, MI, for M and L Auto Sales, Inc., Conner Welding Inc.

Eric A. Linden, Jaffe, Raitt, Heuer & Weiss, P.C., Arthur H. Siegal, Honigman, Miller, Schwartz & Cohn, Detroit, MI, for Diamond Chemical Co.

John G. Gleeson, Laura A. Talt, Howard & Howard, Bloomfield Hills, MI, for Detroit Flat Polishing.

OPINION & ORDER DENYING DEFENDANT DIAMOND CHEMICAL'S MOTION FOR SUMMARY JUDGMENT

GADOLA, District Judge.

On July 28, 1993, plaintiff filed its first amended complaint against defendants pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675. Plaintiff seeks contribution for environmental cleanup costs under CERCLA, allegedly incurred after a specific piece of property was acquired by plaintiff under the power of eminent domain.¹ On October 6, 1993, defendant Diamond Chemical Company ("Diamond") filed the instant motion for summary judgment. Plaintiff filed a response November 23, 1993. Diamond filed a reply December 9, 1993. The hearing on this matter was canceled pursuant to Local Rule 7.1(e)(2) (E.D.Mich. Jan. 1, 1992). The court has not yet issued a scheduling order in this case. Thus, discovery remains open.

I. Facts

This action arises out of the ownership of a parcel of property located at 2531-2569 Conner, 2501-2600 Conner, and 12301-12383 East Vernor in Detroit, Michigan ("Parcel 798"). Plaintiff City of Detroit acquired the property through condemnation and now seeks contribution for costs incurred in conducting an environmental cleanup of Parcel 798.

On May 18, 1987, plaintiff filed a complaint in Wayne County Circuit Court seeking condemnation of certain real property owned by A.W. Miller, Inc. ("Miller") and leased from Miller by various parties including Diamond. On May 19, 1989, a consent judgment was entered between plaintiff and Miller which called for plaintiff to pay Miller $1,115,000.00 as compensation for Miller's ownership interest in the real property. On April 20, 1989, in consideration of Diamond's leasehold interest in the property, a consent judgment was entered between plaintiff and Diamond whereby plaintiff agreed to pay Diamond $45,063.00.

Following the entry of the consent judgments, plaintiff conducted environmental site investigations. Plaintiff discovered that hazardous substances as defined in CERCLA had been stored on the property and that the underground storage tanks had leaked. Plaintiff undertook remedial actions which included the removal of the underground storage tanks. Plaintiff alleges that the remedial cleanup amounted to response costs of $635,104. In addition, plaintiff contends that the Michigan Department of Natural Resources required the construction of a clay cap and French drain system at a cost of $4,114,975.

Diamond is in the business of manufacturing laundry supply products. In 1987, when the property was condemned by plaintiff, Diamond was a tenant of Miller, leasing Building 6A on Parcel 798 for use as a warehouse and as office space. Diamond stored certain laundry supplies in Building 6A, such as bleaches, detergents, starches, and fabric softeners, prior to shipping them to customers. According to its pleadings, Diamond did not manufacture any products in Building 6A but it did "repackage" a dilute bleach solution from "large loads" to "smaller containers for sale." Diamond claims that it's control over and use of Parcel 798 as a whole was limited to Building 6A and the common areas of the property such as the roads and parking areas.

II. Standard of Review for Motion for Summary Judgment

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "A fact is `material' and precludes grant of summary judgment if proof of that fact would have the effect of establishing or refuting one of the essential elements of the cause of action or defense asserted by the parties, and would necessarily affect the application of appropriate principles of law to the rights and obligations of the parties." Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984) (quoting Black's Law Dictionary 881 (6th ed. 1979)) (citation omitted). The Court must view the evidence in a light most favorable to the nonmovant as well as draw all reasonable inferences in the nonmovant's favor. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 993, 8 L.Ed.2d 176 (1962); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir.1984).

The movant bears the burden of demonstrating the absence of all genuine issues of material fact. See Gregg v. Allen-Bradley Co., 801 F.2d 859, 861 (6th Cir.1986). The initial burden on the movant is not as formidable as some decisions have indicated. The moving party need not produce evidence showing the absence of a genuine issue of material fact; rather, "the burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.P. 56(e); Gregg, 801 F.2d at 861.

To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986),

There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the nonmovant's evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

(Citations omitted); see also Celotex, 477 U.S. at 322-23, 106 S.Ct. at 2552; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). The standard for summary judgment mirrors the standard for a directed verdict under Fed.R.Civ.P. 50(a). Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. Consequently, a nonmovant must do more than raise some doubt as to the existence of a fact; the nonmovant must produce evidence that would be sufficient to require submission of the issue to the jury. Lucas v. Leaseway Multi Transp. Serv., Inc., 738 F.Supp. 214, 217 (E.D.Mich.1990), aff'd, 929 F.2d 701 (6th Cir.1991). The evidence itself need not be the sort admissible at trial. Ashbrook v. Block, 917 F.2d 918, 921 (6th Cir.1990). However, the evidence must be more than the nonmovant's own pleadings and affidavits. Id.

III. Analysis

To make out a prima facie case in a private-party suit under CERCLA, the plaintiff must allege four elements:

1. That the defendant falls within one of the four categories of "covered persons" as defined in 42 U.S.C. § 9607(a);

2. That there was a release or a threatened release of a hazardous substance from defendant's facility;

3. That the release or threatened release caused the plaintiff to incur response costs; and

4. That the plaintiff's costs were necessary costs of response consistent with the national contingency plan.

Dedham Water Co. v. Cumberland Farms Dairy, 889 F.2d 1146, 1150 (1st Cir.1989). Those who may be held liable as "covered persons," as defined in 42 U.S.C. § 9607(a), are (1) current owners and operators of a facility, (2) former owners and operators of a facility who owned or operated the facility at the time of disposal of hazardous substances at such facility, (3) owners and/or possessors of the hazardous waste itself who arrange for its transport, disposal or treatment, and (4) those who transport hazardous waste. See id. at 1151.

Plaintiff alleges the first of the four elements listed above by stating the following:

While Diamond Chemical Co., Inc. owned, operated and/or leased the Parcel, there were underground storage tanks on the Parcel and the Parcel may have been contaminated with, among other things, polynuclear aromatic compounds (PNA's) and hazardous substances as a consequence. In addition, it is believed that Diamond Chemical Co., Inc. warehoused laundry supplies including flammable liquids, soaps and detergents which may have contaminated the Parcel as a consequence.

First Amended Complaint, Paragraph 57 (emphasis in original). From these allegations, it appears that plaintiff is claiming that defendant incurred liability under the second and third categories of covered persons (former operator at time of release and owner/possessor of hazardous substance who arranged disposal), 42 U.S.C. § 9607(a)(2)-(3).

In paragraphs 71, 72, and 73...