City of North Miami, Fla. v. Berger, Civil No. 92-1344-A.

Citation828 F. Supp. 401
Decision Date04 August 1993
Docket NumberCivil No. 92-1344-A.
PartiesThe CITY OF NORTH MIAMI, FLORIDA, Plaintiff, (realigned) v. Morris BERGER, Personal Representative for the Estate of Frank B. Kaufman, et al., Defendants.
CourtUnited States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)

COPYRIGHT MATERIAL OMITTED

Robert S. Hall, Jr., Ridgway M. Hall, Jr., William L. Anderson, Judith A. Reinsdorf, Crowell & Moring, Washington, DC, for plaintiff.

Joshua N. Rose, Thomas S. Schaufelberger, Wright, Robinson, McCammon, Osthimer & Tatum, Washington, DC, Robert R. Vieth, McGuire, Woods, Battle & Boothe, McLean, VA, Frank E. Brown, Jr., Joel Dahnke, Mays & Valentine, Alexandria, VA, for defendants.

MEMORANDUM OPINION

ELLIS, District Judge.

I.

This CERCLA case grows out of the ill-fated efforts of the City of North Miami, Florida ("City") and various entities and individuals to develop a municipal recreational complex on city-owned property in south Florida. Those efforts included the 1974 to 1980 operation of a landfill at the site, a landfill that is alleged to be the source of hazardous substance releases. In this action, the City seeks to recover from defendants the past and future costs associated with the cleanup and remediation of these hazardous substance releases pursuant to the cost recovery provisions of the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. In addition, the City asserts a contribution claim under Florida law.

Defendants in this case are Morris Berger, Personal Representative for the Estate of Frank Kaufman ("Berger" or "the Estate"), Said Haddad ("Haddad"), Marvin Sadur ("Sadur"), ABC Demolition Company ("ABC"), and Post, Buckley, Schuh & Jernigan ("PBS & J"). Kaufman, Haddad, and Sadur were three of the officers and shareholders of Munisport, Inc. ("Munisport"), the company that undertook the development project and operated the landfill at issue in this case.1 ABC Demolition Co. and PBS & J were independent contractors that Munisport hired to perform construction and engineering services, respectively, in connection with the development and construction of the recreational complex.

This matter is before the Court on (i) the City's motion for partial summary judgment as to all defendants; and (ii) the summary judgment motions of the Estate, Haddad, Sadur, and PBS & J. Of the defendants, only ABC did not file a motion for summary judgment. Typical of CERCLA cases generally, the liability and damages issues in this case may be appropriately treated separately. The motions at bar present only liability issues, namely whether any of defendants are liable for any remediation or cleanup costs. Reserved for trial are the ordinarily more technically complex factual questions concerning what remediation steps must be taken, what costs are involved, and the proportionate fault of the liable parties. See Chesapeake and Potomac Tel. Co. v. Peck Iron & Metal Co., 814 F.Supp. 1269, 1274 (E.D.Va. 1992) (quoting Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 667-68 (5th Cir.1989) (emphasis added)). In this case, while the parties disagree as to the weight and legal effect to be given to certain facts relating to defendants' CERCLA liability, these disputes do not preclude resolution on summary judgment. Indeed, examination of the undisputed facts presented here compels the conclusion that resolution of defendants' CERCLA liability at the summary judgment stage is manifestly appropriate.

II.

In October 1972, the City entered into a lease agreement with Munisport, a Florida corporation formed by some of the defendants, under which the City leased to Munisport 281 acres of raw land. Pursuant to the lease agreement, Munisport agreed to develop the land and construct a municipal recreational complex featuring two 18-hole golf courses. In return, the City agreed to lease the property as improved to Munisport for thirty years, during which time Munisport would operate the complex and retain the lion's share of the revenues earned. Munisport was jointly controlled by Frank Kaufman and Said Haddad, each holding 32.5% of the shares. Haddad served as President of the corporation and Kaufman was its Treasurer. The remaining minority shares of Munisport were distributed among various consultants needed to develop the raw land into a recreational facility. Included among these consultants was Marvin Sadur, Munisport's lawyer and corporate secretary, who owned approximately 15% of Munisport's shares.

Soon after the execution of the 1972 lease agreement, the parties agreed to permit Munisport to operate a landfill on the property in order to raise the level of the terrain and help defray the costs of constructing the golf courses. The City and Munisport amended the lease in 1974 to reflect this agreement.2 Shortly thereafter, the Munisport landfill began accepting household garbage, construction debris, vegetative materials, and industrial and commercial refuse. Munisport retained the services of defendant PBS & J, an engineering firm, to prepare the engineering plans and drawings for the project, assist in obtaining the necessary permits, and provide engineering and consulting services in connection with the operation of the landfill. In addition, Munisport contracted with ABC Demolition Co. to develop the property, operate the landfill, and construct the golf courses and other recreational facilities. Like Munisport, ABC was controlled by Kaufman and Haddad, with each owning 50% of the shares and Kaufman serving as ABC's President. The Munisport landfill operated from 1974 to 1980. During this time, the landfill accepted over 6 million cubic yards of solid wastes, including some hospital wastes and some known toxic wastes, though the precise quantities of these wastes are disputed. Operation of the landfill, Munisport's sole business activity, generated approximately $8 million in revenue for Munisport.

From its inception, the Munisport development project faced intense regulatory scrutiny. In January 1975, in response to an enforcement action by the Florida Department of Pollution Control (which subsequently became the Department of Environmental Regulation or "DER"), Munisport applied for a temporary operating permit for the landfill. This permit issued on May 9, 1975, and reissued on September 21, 1976. It named Munisport as the operator and the City as the owner and imposed a variety of specific operating conditions. A full DER operating permit issued on June 8, 1979. In addition, because the eastern end of the site included approximately 103 acres of wetlands, Munisport obtained a dredge and fill permit from DER on January 5, 1976, which was modified on March 21, 1977. Both of the dredge and fill and the landfill operating permits were subject to the issuance of a comparable dredge and fill permit from the U.S. Army Corps of Engineers under the Federal Water Pollution Control Act, 33 U.S.C. § 1344. The federal permit issued on March 15, 1976 and expired on March 15, 1979.3 Permits for the landfill were also obtained from various other local entities, including the Dade County Fire Department. Additionally, the landfill was closely monitored by the Metropolitan Dade County Department of Environmental Resources and the U.S. Environmental Protection Agency ("EPA").

Not surprisingly, the landfill was subjected to private as well as public scrutiny. The project faced opposition from the Florida Audubon Society and from a small but vocal group or neighboring citizens. Given the rigorous regulatory climate and the vigorous local opposition, the City, Munisport, and ABC often found themselves enmeshed in administrative proceedings and civil litigation. In fact, during the operation of the landfill, Munisport was cited for numerous violations of permit conditions and regulatory requirements. Among these violations were the placement of waste in the groundwater, failure adequately to cover the garbage, disposal of hazardous wastes on site, illegal acceptance of hospital wastes, and improper placement of waste within thirty feet of lakes. Defendant Sadur handled all legal proceedings relating to the project, including matters relating to these violations.

In March 1980, the DER notified Munisport and the City of its intent to revoke the landfill operating permit and the state dredge and fill permit based on the various permit and regulatory violations. A year later, following the requisite administrative proceedings, DER revoked these permits. Meanwhile, EPA had been expressing increasing concern that ammonia leachate from the landfill would contaminate groundwater which, in turn, would migrate into the adjacent State Mangrove Preserve. As a result, apparently, of this concern, EPA vetoed Munisport's request for renewal and extension of the Corps of Engineers dredge and fill permit, which had expired on March 15, 1979. Without the permit, Munisport could not take steps to fill the 103 acres of wetlands that constituted the eastern portion of the tract. This, in turn, made it impossible to construct the planned 36-hole golf course on the site, thereby threatening the economic viability of the entire project. Thus it was that in July 1980, Munisport, faced with the state permit revocation proceedings and the EPA's announced intent to veto any Corps of Engineers dredge and fill permits, ceased its landfill operations. This ultimately doomed the entire project and Munisport as well. Munisport was dissolved a year later.

On September 8, 1983, EPA listed the Munisport landfill on its CERCLA "National Priorities List" of uncontrolled hazardous release sites. EPA sent letters of potential liability to Haddad, Kaufman, Sadur, Munisport, ABC, the City, and others. In accordance with established CERCLA procedures, EPA conducted a series of extensive environmental investigations of the site, which included comprehensive sampling of surface water, groundwater, soils and...

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