Compton v. Texaco Inc.

• Decision Date: 05 April 2001
• Citation: 42 S.W.3d 354
• Parties: <!--42 S.W.3d 354 (Tex.App.-Houston 2001) JEFF COMPTON, TRUSTEE OF THE LIQUIDATING TRUST OF WINN'S STORES, INC., Appellant v. TEXACO, INC., Appellee NO. 14-99-01178-CV In The Fourteenth Court of Appeals Texas, Houston
• Court: Texas Court of Appeals

Page 354

42 S.W.3d 354 (Tex.App.-Houston [14th Dist.] 2001)

JEFF COMPTON, TRUSTEE OF THE LIQUIDATING TRUST OF WINN'S STORES, INC., Appellant v TEXACO, INC., Appellee

NO. 14-99-01178-CV

In The Fourteenth Court of Appeals Texas, Houston.

April 5, 2001.

On Appeal from the 234th District Court Harris County, Texas Trial Court Cause No. 98-28404.

Panel consists of Justices Anderson, Fowler, and Edelman.

OPINION

Fowler, Justice.

In a case of first impression in this state, we must decide whether the Texas Solid Waste Disposal Act bars appellant Compton's claims for contribution and indemnity against appellee Texaco, Inc. ("Texaco"). We must also decide whether Compton may assert a claim against Texaco for non-contractual, common law indemnity. The trial court entered summary judgment in Texaco's favor dismissing Compton's claims. For the reasons set out below, we affirm the trial court's judgment.

Background

From 1929 to 1949, Texaco operated a refinery on approximately 40.6 acres of land near San Antonio, Texas (the "Site"). WSI Properties, Inc. purportedly purchased the property from Texaco "as is" in 1977. WSI, in turn, sold the Site to Winn's Stores, Inc. for use as a corporate headquarters and distribution center. Environmental contamination was evidently discovered for the first time at the Site during the construction of Winn's corporate headquarters. Later, it was also learned that underground petroleum storage tanks installed by WSI for use at Winn's distribution center had leaked, causing additional contamination at the Site. Both Texaco and Winn's were ultimately identified by the Texas Natural Resource Conservation Commission ("TNRCC") as potentially responsible parties or "PRP's" for the Site's environmental contamination.

Winn's filed for bankruptcy in 1994 and, as part of that proceeding, the Liquidating Trust of Winn's Stores, Inc. was formed with Jeff Compton as its trustee. As trustee, Compton was responsible for liquidating Winn's assets, including the Site. Compton's efforts to sell the Site were complicated by the property's environmental contamination. Appellant Jeff Compton, Trustee of the Liquidating Trust of Winn's Stores, Inc. ("Compton"), submitted various proposals to the TNRCC in an effort to remediate the contaminated property through the State's Volunteer Cleanup Program ("VCP"), but he was unable to negotiate a cost-effective plan for doing so. Therefore, instead of remediating the Site directly, Compton elected to pay a sum of money to a general remediation fund administered by the State and the TNRCC in exchange for a release from future environmental liability. To make this payment, Compton sold the Site to two separate companies, Sideoats, L.L.C. and LGC Land, L.L.C. Under the terms of these sales, Sideoats and LGC agreed to pay a total of $1.25 million to the State's general remediation fund. Sideoats and LGC then assigned to Compton any rights they had to recover the $1.25 million from Texaco. Compton also paid $250,000 to the remediation fund and, in return, the State released Compton, LGC, and Sideoats from environmental liability in connection with the Site.

Later Texaco also entered into a settlement agreement with the State ("Settlement Agreement") and agreed to be responsible for remediating the Site. The Settlement Agreement expressly provides that it resolves all of Texaco's liability to the State for the Site. The Settlement Agreement also states that its effect is to bar third party claims against Texaco for cost recovery, contribution, or indemnity under 344(a) of the Texas Solid Waste Disposal Act.

After he settled with the State, Compton brought suit against Texaco for common law indemnity as well as statutory contribution under 344(a) of the Texas Solid Waste Disposal Act. In particular, Compton sought to recover the costs necessary to discover the full extent of the environmental damage allegedly caused by Texaco as well as the $1.5 million in payments to the State. Texaco filed a motion for summary judgment, arguing that Compton is not entitled to contribution or indemnity as a matter of law because the Texas Solid Waste Disposal Act protects parties who settle with the State from those claims. Texaco also argued that Compton's common law indemnity claims fail as a matter of law on several grounds. The trial court granted Texaco's motion and ordered that Compton take nothing.

Issues Presented

Compton appeals and contends that the trial court erred in granting summary judgment. Compton presents the following issues for review: (1) whether Compton is entitled to common law indemnity (2) whether Compton is entitled to statutory contribution under the Texas Solid Waste Disposal Act; (3) whether Texaco's settlement with the State resolves all of Texaco's liability to the State for the Site so as to bar Compton's claims under 277 of the Texas Solid Waste Disposal Act; and (4) whether the Texas Solid Waste Disposal Act precludes claims for common law indemnity under these circumstances.

Standards of Review

A party moving for summary judgment must establish its right to summary judgment on the issues presented to the trial court by conclusively proving all elements of the movant's claim or defense as a matter of law. See TEX. R. CIV. P. 166a(c); Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex. 2000). To be entitled to summary judgment, a defendant whose motion is based on an affirmative defense must conclusively establish that defense. Id. On appeal, the movant must still show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Id. In this case, we must interpret and apply the Texas Solid Waste Disposal Act. In general, matters of statutory construction are questions of law for the court to decide rather than issues of fact. Id. Because the parties do not dispute the material facts, this is a proper case for summary judgment. Id.

What is the Effect of Texaco's Settlement Under the Texas Solid Waste Disposal Act?

A threshold issue in this case is whether, as Texaco contends, its settlement with the State bars Compton's claims for statutory contribution under the Texas Solid Waste Disposal Act. Compton seeks to recover his costs under the contribution scheme set out in 344(a) of the Texas Solid Waste Disposal Act. See TEX. HEALTH & SAFETY CODE ANN. 361.344(a)(Vernon Supp. 2000). That statute provides, in pertinent part, as follows:

A person who conducts a removal or remedial action that is approved by the commission and is necessary to address a release or threatened release may bring suit in a district court to recover the reasonable and necessary costs of that action and other costs as the court, in its discretion, considers reasonable. This right is in addition to the right to file an action for contribution, indemnity, or both in an appeal proceeding or in an action brought by the attorney general.

TEX. HEALTH & SAFETY CODE ANN. 361.344(a)(Vernon Supp. 2000).

Texaco insists that it is entitled to protection from Compton's claims because Texaco has entered into a settlement with the State that has resolved all of Texaco's liability for the Site. The Settlement Agreement reads, in pertinent part, as follows:

7. RELEASES AND COVENANTS NOT TO SUE.

a. In consideration of Texaco's agreement to conduct investigative and remedial activities at the Site and subject only to the EXCEPTIONS contained in paragraph 8 below, the TNRCC hereby RELEASES Texaco, its present and former officers, directors, attorneys, employees, agents, successors, and assigns, for all matters stated in paragraph 6 above.

b. In consideration of Texaco's agreement to conduct investigative and remedial activities at the Site and subject only to the EXCEPTIONS contained in paragraph 8 below, the TNRCC hereby COVENANTS NOT TO SUE or take administrative action against Texaco, its present and former officers, directors, attorneys, employees, agents, successors, and assigns, for all matters stated in paragraph 6 above, provided however, that this COVENANT NOT TO SUE shall take effect upon issuance of a final Certificate of Completion by the VCP.

. . .

8. EXCEPTIONS. The following Exceptions apply to the Releases and Covenants Not to Sue in paragraph 7 above:

a. The Release and Covenant Not to Sue shall become Void if:

(i) Previously unknown or undetected conditions related to Texaco's prior ownership or operations of Texaco arise or are discovered at the Site after the completion of the remediation, such conditions indicate that the remediation undertaken by Texaco is not protective of human health and the environment, and Texaco refuses to address the conditions under the VCP; or

(ii) The TNRCC receives additional information, which was not available prior to the completion of the remediation, concerning scientific determinations on which the remediation was premised (for example: health effects associated with levels of exposure, toxicity of hazardous substances, and the adequacy of remedial technologies employed in eliminating the endangerment to the public health), and this additional information indicates that Site conditions following remediation are not protective of human health and the environment, and Texaco refuses to address the conditions under the VCP.

b. The Release shall become Voidable as to Texaco if Texaco breaches this Agreement by failing to perform its obligations under subsections 3a.-3e. of this Agreement. A deviation from an approved work plan or schedule attributable to a denial of access to the Property by its current owner(s) in breach of or due to the restrictions on access contained in the Existing Access Agreements or attributable to a good faith invocation of Dispute Resolution shall not constitute a breach of this Agreement.

c. If both the Release and the Covenant Not to Sue become Void as to Texaco, the TNRCC shall have the right to seek such relief against Texaco with respect to this...