Cross Oil Co. v. Phillips Petroleum Co.

• Decision Date: 11 October 1996
• Docket Number: No. 4:95CV1380-DJS.,4:95CV1380-DJS.
• Citation: 944 F.Supp. 787
• Parties: CROSS OIL COMPANY, et al., Plaintiffs, v. PHILLIPS PETROLEUM COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Missouri

944 F.Supp. 787

CROSS OIL COMPANY, et al., Plaintiffs, v. PHILLIPS PETROLEUM COMPANY, Defendant.

No. 4:95CV1380-DJS.

United States District Court, E.D. Missouri, Eastern Division.

October 11, 1996.

John F. Arnold, Joan M. Swartz, Nelson G. Wolff, Lashly and Baer, St. Louis, MO, for plaintiffs.

Ian P. Cooper, Richard J. Paulter, Peper and Martin, St. Louis, MO, for defendant.

ORDER

STOHR, District Judge.

Pending before the Court is defendant's motion to dismiss and motion to strike certain portions of plaintiffs' first amended complaint. Plaintiffs filed their first amended complaint in seven counts and seek to recover expenses incurred in cleaning up environmental contamination on property they acquired from defendant on or about June 1, 1977.

A. Standard When Ruling on a Motion to Dismiss

In ruling on defendant's motion to dismiss for failure to state a claim, the Court must view the facts alleged in the complaint in the light most favorable to plaintiffs. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). A motion to dismiss will not be granted merely because the complaint does not state with precision every element necessary for recovery. A complaint is sufficient if it "contain[s] allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial." 5 Charles A. Wright, Arthur R. Miller, Federal Practice and Procedure § 1216, at 159. A complaint should not be dismissed unless it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); Hungate v. United States, 626 F.2d 60, 62 (8th Cir.1980). For the purpose of defendant's motion to dismiss, the Court takes all facts alleged in plaintiffs' amended complaint as true. Westcott v. Omaha, 901 F.2d 1486, 1488 (8th Cir.1990).

B. Plaintiffs' Allegations

On or about June 1, 1977, Herbert A. Cross and Delores B. Cross acquired certain realty situated in St. Louis County, Missouri ("the Property") from defendant. The Property was subsequently transferred to the Herbert A. Cross Revocable Living Trust. At all times during ownership by Herbert A. Cross, Delores B. Cross and the Revocable Living Trust, Cross Oil Company operated the Property. Prior to July 1, 1977, defendant owned the Property and operated a gasoline station and underground storage tanks on the Property.¹

In October of 1991, Cross Oil Company learned by virtue of an environmental site assessment that some hydrocarbon contamination was present underneath the Property. The hydrocarbons constitute hazardous wastes. At no time prior to plaintiffs' acquisition of the Property did defendant disclose to plaintiffs the existence of any contamination upon the Property. A bioremediation plan has been implemented at the Property and is ongoing. The plan received approval of the Missouri Department of Natural Resources. Plaintiffs have incurred expenses in excess of $350,000 relating to cleanup of the hydrocarbon contamination underneath the Property.

C. Plaintiffs' Amended Complaint

Counts I and II

In Count I, plaintiffs seek damages from defendant pursuant to the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6972. Recently, in Meghrig v. KFC Western, Inc., ___ U.S. ___, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996), the Supreme Court considered the precise issue of whether RCRA "authorizes a private cause of action to recover the prior cost of cleaning up toxic waste that does not, at the time of suit, continue to pose an endangerment to health or the environment." Id. at ___, 116 S.Ct. at 1253. The Supreme Court "conclude[d] that it does not." Id. Because plaintiffs have not pled that the hydrocarbon contamination in issue presents an imminent and substantial endangerment to health or the environment, RCRA does not provide plaintiffs with a private cause of action to recover costs for their cleanup efforts. Thus, the Court will grant defendant's motion to dismiss as to Count I.

In Count II, plaintiffs seek a declaratory judgment under RCRA stating that defendant is strictly liable to plaintiffs for the environmental cleanup costs and losses that plaintiffs have incurred and will continue to incur. As discussed above, the Supreme Court has recently held that although RCRA does not prevent a private party from recovering its cleanup costs under other federal or state laws, the limited remedies described in the statute demonstrate that "Congress did not intend for private citizens to be able to undertake a cleanup and then proceed to recover costs under RCRA." Id. at ___, 116 S.Ct. at 1256. The Court will grant defendant's motion to dismiss as to Count II.

Count III

In Count III, plaintiffs seek recovery of costs under a common law theory of strict liability. Plaintiffs allege that defendant's "maintenance of underground storage tanks and the handling, use, storage, treatment and disposal of gasoline, oil, other petroleum products and hazardous waste" constituted "an abnormally dangerous or ultra hazardous activity." Amended Complaint, ¶ 35. Plaintiffs further allege that these activities resulted in damage to the Property and caused plaintiffs to incur environmental cleanup costs. Amended Complaint, ¶¶ 35-38.

The issue before the Court is a narrow one — whether a party can be held strictly liable for damage inflicted upon its own property. Although Missouri courts have not addressed the question, this Court previously confronted the exact issue in Local No. 682 Health and Welfare Trust Fund v. Whiting, No. 91-1575-C-7 (E.D.Mo. May 19, 1992). In Whiting, the plaintiffs alleged that the defendants buried hazardous waste on property previously owned and operated by the defendants, later owned and operated by the plaintiffs. The plaintiffs alleged that the burial occurred during the time the defendants owned the property. In Whiting, the Court dismissed the plaintiffs' claim based upon strict liability. The Court adopts the following reasoning from Judge Hamilton's unpublished decision:

Section 519(1) of the Restatement (Second) of Torts provides that "[o]ne who carries on an abnormally dangerous activity is subject to liability for harm to the person, land or chattels of another resulting from the activity, although he has exercised the utmost care to prevent the harm." Restatement (Second) of Torts § 519(1) (1977). This rule of strict liability was originally set forth in Rylands v. Fletcher, L.R. 1 Ex. 265 (1866). Rylands held that if a person brings something on his land which, if it escapes, is likely to do harm, that person is prima facie liable for all the damage naturally occurring if there is an escape. Id. at 279.

Missouri courts have applied the rule of strict liability narrowly. See Bennett v. Mallinckrodt, Inc., 698 S.W.2d 854, 868 (Mo.App.1985), cert. denied, 476 U.S. 1176 [106 S.Ct. 2903, 90 L.Ed.2d 989] (1986). Further, Missouri courts have only applied the strict liability rule where the defendant's activity harms the person or property of another.

* * * * * *

In Wellesley Hills Realty Trust v. Mobil Oil Corp., 747 F.Supp. 93 (D.Mass.1990), a case very similar to the present one, the court refused to extend the abnormally dangerous activity doctrine to the placement of hazardous substances upon one's own land absent harm to the property of another.... This holding is in keeping with the rule set forth in Rylands. Further, the language of Section 519 of the Restatement, focusing on the harm to the person or property of another, also supports the Wellesley holding.

Id. at pp. 4-5.² The Court agrees that "[i]t would be nonsensical to even formulate a rule that an actor is strictly liable for harm inflicted on his or her own property or person." Wellesley, 747 F.Supp. at 102. Because plaintiffs cannot maintain an action for strict liability against defendant as the previous owner of the Property, the Court will grant defendant's motion to dismiss as to Count III.

Count IV

In Count IV, plaintiffs seek recovery of costs under what they label a negligence theory. Plaintiffs allege that (1) defendant owed a duty to plaintiffs to exercise ordinary care in the maintenance and use of the gasoline station and underground storage tanks on the Property; and (2) defendant had a duty "to disclose the presence of contamination and other hidden conditions on the Property which [defendant] knew or should have known would create an unreasonable risk of harm to the Property and the persons thereon." Amended Complaint, ¶ 40. The Court will address these two allegations of negligence separately.

The first issue before the Court is again a narrow one — whether a landowner has a duty to maintain his or her property in a certain condition or to refrain from an activity affecting the property which would extend to future owners of that land. Under Missouri law, "in any action for negligence the plaintiff must establish that (1) the defendant had a duty to the plaintiff; (2) the defendant failed to perform that duty; and (3) the defendant's breach was the proximate cause of the plaintiff's injury." Martin v. City of Washington, 848 S.W.2d 487, 493 (Mo. banc 1993).

The Court, again following the logic set forth in Wellesley, finds that defendant owed no duty to plaintiffs to maintain its property in a certain condition which affected plaintiffs as future landowners. In Wellesley, the Court stated that

[t]he imposition of such a duty would be unreasonable because such future owners may not be known or even contemplated at the time the landowner creates or maintains a condition on his or her property. Moreover, such a duty would unreasonably interfere with a landowner's right of ownership; the right to do with his or her property as desired without liability so long as he or she does not interfere with the rights of others.

Id. at 100.³ See also Dartron Corp....