Edwards v. First Nat. Bank of North East

• Decision Date: 01 September 1997
• Docket Number: No. 955,955
• Citation: 712 A.2d 33,122 Md.App. 96
• Parties: , 47 ERC 1218 Randy EDWARDS, et ux. v. FIRST NATIONAL BANK OF NORTH EAST. ,
• Court: Court of Special Appeals of Maryland

Page 96

122 Md.App. 96

712 A.2d 33, 47 ERC 1218

Randy EDWARDS, et ux. v. FIRST NATIONAL BANK OF NORTH EAST.

No. 955, Sept. Term, 1997.

Court of Special Appeals of Maryland.

June 24, 1998.

A. Frank Carven, III (Brown, Brown & Brown, P.A., on the brief) Bel Air, for Appellants

Michael C. Powell (Gordon, Feinblatt, Rothman, Hoffberger & Hollander, L.L.C., on the brief), Baltimore, for Appellee.

Argued before HARRELL, SALMON and BYRNES, JJ.

BYRNES, Judge.

Randy and Cynthia Edwards, appellants, challenge a ruling of the Circuit Court for Cecil County dismissing their claims against First National Bank of North East, appellee, in a toxic-tort groundwater contamination case. On appeal, Mrs. and Mrs. Edwards pose the following question for review, which we have rephrased slightly:

Did the circuit court err in ruling that the limited exemption from liability granted to lenders under Md.Code (1997 Cum.Supp.), § 4-401(i)(2)(i)(2) of the Environment Article ("Env.") abrogates Maryland's common law causes of action for negligence, nuisance, trespass, and strict liability against a lender? ¹

We answer the question presented "yes." Accordingly, we reverse the judgment in favor of First National Bank of North East and remand for further proceedings.

FACTS

Randy and Cynthia Edwards are the owners of residential real property in North East, Maryland known as 505 Mechanics Valley Road. Their property is adjacent to and downgrade from commercial property known as 513 Mechanics Valley Road. For approximately twenty years, the 513 Mechanics Valley Road site was used for a gasoline service station. During part of that time, from 1981 until 1994, the property was owned by Jacqueline C. Yerkes. Mrs. Yerkes and her husband added a mini-market to the gasoline service station. The property came to be called the "T & C Mini Market."

First National Bank of North East ("the Bank") held a mortgage on the T & C Mini Market property. When Mrs. Yerkes defaulted on the mortgage, the Bank foreclosed on the property. Thereafter, on May 10, 1994, it purchased the property at the foreclosure sale and took possession of it. A few weeks later, the Bank conducted "tank tightness tests" on two 6,016 gallon underground storage tanks ("USTs") and one 3,000 gallon UST on the property. The tanks passed all of the tests and were judged to be tight.

The Bank then contracted with Edwards Service Station Equipment, Inc. ("ESSE") to remove the USTs. ESSE did so on October 24, 1994, under the watchful eyes of Maryland Department of the Environment ("MDE") employees. Removal of the USTs produced a strong smell of petroleum. Tests that were later performed on the property by MDE revealed the presence of petroleum byproducts in the soil at levels greater than permitted by law. MDE arranged for three testing wells to be installed on the T & C Mini Market property and ordered further testing to be undertaken. Those tests showed the continued presence of petroleum byproducts in the land.

In the meantime, on May 5, 1994, shortly before the Bank took possession of the T & C Mini Market property, Mr. and Mrs. Edwards installed a new deep well on their property. They did so in part because Mrs. Edwards was operating a day care center in their home and she needed to comply with In late November, 1994, Mr. and Mrs. Edwards noticed the smell of gasoline in their house. When the smell intensified, they had their well-water tested. Tests performed on January 23, 1995 came up positive for PH-petroleum hydrocarbons. The MDE performed additional tests that confirmed the presence of petroleum byproducts in the Edwards's well.

certain local health regulations. The new well was approved by the Cecil County Health Department on September 9, 1994, after officials "completed multiple tests and personal inspections."

On August 20, 1996, Mr. and Mrs. Edwards filed suit for damages against the Bank and against ESSE for injury to their real and personal property, in the Circuit Court for Cecil County. They pleaded causes of action against both defendants for violation of Env. § 4-409, negligence, nuisance, trespass, and strict liability. On December 20, 1996, the Bank filed a motion to dismiss for failure to state a claim for which relief could be granted, pursuant to Md. Rule 2-322. Mr. and Mrs. Edwards opposed the motion, and the matter was set in for a hearing before the trial court on April 9, 1997.

In its memorandum of law in support of its motion to dismiss and at the hearing before the trial court, the Bank argued that it was exempt from liability under Env. § 4-409(a) by the protections conferred by Env. § 4-401(i)(2)(i)(2) and, moreover, that the common law causes of action against it were preempted by Env. § 4-401(i)(2)(i)(2). After hearing argument of counsel, the trial court granted the Bank's motion, from the bench. It subsequently issued a written order dismissing the Bank from the case and entering final judgment against Mr. and Mrs. Edwards in favor of the Bank upon a finding that "there is no just reason for delay," under Md. Rule 2-602(b). ² Mr. and Mrs. Edwards then noted this appeal.

STANDARD OF REVIEW ³

On review of a judgment granting a motion to dismiss under Md. Rule 2-322, we must assume as true all well-pleaded

facts in the complaint and all reasonable inferences that may be drawn from them. Stone v. Chicago Title Ins. Co. of Md., 330 Md. 329, 333, 624 A.2d 496 (1993). We then decide whether the well-pleaded allegations of fact in the complaint reveal any set of facts that would entitle the plaintiff to relief. If so, the motion to dismiss was improperly granted. Shah v. HealthPlus, 116 Md.App. 327, 331-32, 696 A.2d 473, cert. denied, 347 Md. 682, 702 A.2d 291 (1997); Morris v. Osmose Wood Preserving, 99 Md.App. 646, 652-53, 639 A.2d 147 (1994), aff'd in part, rev'd in part, 340 Md. 519, 667 A.2d 624 (1995); Tafflin v. Levitt, 92 Md.App. 375, 379, 608 A.2d 817 (citing Flaherty v. Weinberg, 303 Md. 116. 135-36, 492 A.2d 618 (1985)), cert. denied, 328 Md. 447, 614 A.2d 974 (1992).

DISCUSSION

Soon after Mr. and Mrs. Edwards noted their appeal in the case sub judice, the Court of Appeals filed its opinion in JBG/Twinbrook Metro Ltd. v. Wheeler, 346 Md. 601, 697 A.2d 898 (1997). In that case, the Court addressed, inter alia, the scope of the private remedy established by Env. § 4-409(a). That section provides:

The person responsible for the oil spillage shall be liable to any other person for any damage to his real or personal property directly caused by the spillage.

In JBG/Twinbrook, a property owner sued his neighbor for damages caused by percolation of gasoline into the plaintiff's land from the neighbor's adjacent gasoline station. The Court examined the legislative history of the Water Pollution Control and Abatement Act, Md.Code §§ 4-401 through 4-420 of the Environment Article (the "Act"), and Env. § 4-409 in particular, and held that the private cause of action created by § 4-409(a) did not apply to the case. Specifically, it found that "the 'oil spillage' referred to in [that section] is a spillage or discharge from a vessel, ship, or boat,' " id. at 613, 697 A.2d 898, and "does not apply to a discharge from an UST ..." Id. at 618, 697 A.2d 898.

In light of the Court's decision in JBG/Twinbrook, Mr. and Mrs. Edwards concede, as they must, that the private remedy created by Env. § 4-409(a) is not available to them and that the lower court correctly dismissed their claim under that statute, albeit for a different reason. They do not contest the dismissal of that claim. They maintain, however, that the circuit court erred in ruling that the Water Pollution Control and Abatement Act in its entirety, and Env. § 4-401(i)(2)(i)(2) specifically, abrogated their common law causes of action for negligence, nuisance, trespass, and strict liability in tort.

Env. § 4-401 sets forth definitions for certain terms that are used in the Act. "Person responsible for the discharge," one such term, is defined at Env. § 4-401(i)(1) to include:

(i) The owner of the discharged oil ⁴;

(ii) The owner, operator, or person in charge of the oil storage facility, vessel, barge, or vehicle involved in the discharge at the time of or immediately before the discharge; and

(iii) Any other person who through act or omission causes the discharge.

The statutory language at issue in this case appears in Env. § 4-401(i)(2), which defines those who do not fall into the category of "Person responsible for the discharge:"

(i) A person who, without participating in the management of an underground oil storage tank, and who otherwise is not engaged in petroleum production, refining, or marketing, holds indicia of ownership in an underground oil storage tank primarily to protect its security interest in that underground oil storage tank if that person [ ... ]

2. Abandoned that underground oil storage tank under regulations of the Department within 180 days of acquiring the tank through foreclosure or other means. ⁵

The Bank contends that, on the facts alleged in the complaint and within the meaning of Env. § 4-401(i)(2)(i)(2), it "abandoned" the USTs at the T & C Mini Market site within 180 days of acquiring the property through foreclosure and thus it is not a "Person responsible for the discharge" under the Act. It argues further that because the legislative intent behind Env. § 4-401(i)(2)(i)(2) is, to use its words, "to protect a foreclosing lender from liability if the lender removes an underground storage tank within 180 days following foreclosure," the trial court properly ruled that the Act abrogated all common law causes of action against it arising out of contamination of adjacent property by oil kept in the USTs on the T & C Mini Market property. We disagree.

In determining the legislative intent of a statute, " '[t]he primary source ... is, of course, the language of the statute itself.' " State v. Pagano, 341 Md. 129, 133, 669 A.2d 1339 (1996)(citing ...