Fisher Development Co. v. Boise Cascade Corp.

• Decision Date: 21 September 1994
• Docket Number: No. 93-5163,93-5163
• Citation: 37 F.3d 104
• Parties: FISHER DEVELOPMENT CO., a New Jersey Limited Partnership v. BOISE CASCADE CORPORATION; Chesapeake Industries, Inc.; Keystone Millwork Company; Reliance Universal Chemicals, jointly and severally and in the alternative. BOISE CASCADE CORPORATION, Defendant/Third-Party Plaintiff v. PACIFIC WOOD PRODUCTS COMPANY, a/k/a Davidson P.W.P.; Plywood Panels, Inc., Third-Party Defendants. Fisher Development Co., Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 104

37 F.3d 104

39 ERC 1519

FISHER DEVELOPMENT CO., a New Jersey Limited Partnership v. BOISE CASCADE CORPORATION; Chesapeake Industries, Inc.;

Keystone Millwork Company; Reliance Universal

Chemicals, jointly and severally and in

the alternative.

BOISE CASCADE CORPORATION, Defendant/Third-Party Plaintiff v. PACIFIC WOOD PRODUCTS COMPANY, a/k/a Davidson P.W.P.;

Plywood Panels, Inc., Third-Party Defendants.

Fisher Development Co., Appellant.

No. 93-5163.

United States Court of Appeals Third Circuit.

Argued Nov. 4, 1993.

Decided Sept. 21, 1994.

Abraham C. Reich (Argued), Stephanie Resnick, Samuel H. Israel, Fox, Rothschild, O'Brien & Frankel, Philadelphia, PA, and Richard J. Jubanyik, Jubanyik, Varbalow, Tedesco, Shaw & Shaffer, Cherry Hill, NJ, for appellant Fisher Development Co.

George J. Miller, Dechert, Price & Rhoads, Philadelphia, PA, Bruce W. Clark (Argued) Dechert, Price & Rhoads, Princeton, NJ, for appellee Boise Cascade Corp.

BEFORE: SLOVITER, Chief Judge, and STAPLETON, Circuit Judge, and RESTANI, ^* Judge, United States Court of International Trade.

OPINION OF THE COURT

STAPLETON, Circuit Judge:

Fisher Development Company ("Fisher") sued Boise Cascade Corp. ("Boise") to recover response costs it incurred in voluntarily remediating a hazardous waste site it owned. Fisher claimed that Boise, the sublessee of the site from 1974 to 1977, was a responsible party pursuant to Section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Sec. 9607(a). In granting Boise's motion for summary judgment, the district court found that a release, previously executed in favor of Boise in connection with the settlement of a landlord-tenant dispute extinguished all claims against it, including any claim for environmental clean-up costs. Fisher appeals. We will affirm.

I.

Fisher owned property located at 875 Sherman Avenue, Pennsauken, New Jersey ("the premises"). Fisher agreed to lease the premises to Chesapeake Industries, Inc. ("Chesapeake") from March 1, 1967, to February 28, 1982. Fisher soon assigned its interest in the lease to Route 73 Industrial Development Corporation ("Route 73"), whose vice president, Daniel Fisher, was also a general partner of Fisher. In February, 1980, Route 73 reassigned its interest in the lease back to Fisher.

Keystone Millwork Company ("Keystone"), a subsidiary of Chesapeake, produced plywood panels and doors at the premises from 1967 until 1973 or early 1974. At that point, Chesapeake assigned the lease to Boise, which agreed to assume all liabilities of Chesapeake under its lease with Fisher. Boise manufactured plywood panels on the premises from April 1974 until August 1976. In September 1977, Boise, with Route 73's consent, entered into a sub-sublease with Winner Sales and Services Company, Inc. ("Winner Sales"), which thereafter used the premises as a warehouse.

While Winner Sales was occupying the premises, Boise and Route 73 had a disagreement regarding responsibility for repairs and maintenance at the premises. Boise sued Route 73 in the Superior Court of New Jersey, Chancery Division, in October 1978 to enforce covenants in the original lease between Fisher and Chesapeake. Subsequently, Winner Sales filed for bankruptcy protection, thereby making the controversy between Boise and Route 73 the subject of an adversary proceeding in the United States Bankruptcy Court for the District of New Jersey.

Boise, Route 73, and Fisher ultimately entered into an agreement settling the suit. Part of this agreement called for the parties to exchange reciprocal releases. The release in favor of Boise, which was executed on April 16, 1981, was prepared on a pre-printed form labeled "N.J. Release, General" and consisted of two parts. The first part, which included the pre-printed terms, provided that Route 73 and Fisher:

[R]emised, released and forever discharged, and by these Presents do [ ] remise, release, and forever discharge [Boise] of and from all debts, obligations, reckonings, promises, covenants, agreements, contracts, endorsements, bonds, specialties, controversies, suits, actions, causes of actions, trespasses, variances, judgments, extents, executions, damages, claims or demands, in law or in equity, which against [Boise], [Route 73 or Fisher] ever had, now has or hereafter can, shall, or may have, for, upon or by reason of any matter, cause or thing whatsoever, from the beginning of the world to the day and date of these Presents.

The parties then typed in additional language following the pre-printed phrase "[m]ore particularly." This language provided for the release of:

[A]ny and all claims arising from or related to certain suits now pending in the Superior Court in New Jersey, Chancery Division, Camden County, Docket No. C-660-78 in which Boise Cascade Corporation is the plaintiff and Route 73 Industrial Development Corporation is the defendant; and, in the United States District Court for the District of New Jersey, Bankruptcy No. 80-03165, Adversary Nos. 80-0270 and 0271.

Together with any and all claims arising out of or related to a certain Lease Agreement pursuant to which Boise Cascade Corporation sublets certain premises known as 875 Sherman Avenue, Pennsauken, New Jersey, Route 73 Industrial Development Corporation being the successor to Fisher Development Co., original lessor of the subject premises, together with any subsequent Lease Agreements, Modifications or Amendments thereto; and/or any claims arising from or related to Boise Cascade Corporation's occupation of the subject premises, or any tenant or party occupying the subject premises under Boise Cascade Corporation.

Boise paid Fisher $2,000.00 as a part of the settlement agreement.

According to Fisher, in 1989, eight years after the execution of the releases, it discovered that a cistern on the premises contained volatile organic compounds, which were migrating into the surrounding subsoils and the groundwater. Fisher voluntarily remediated the hazardous substances at the premises at a cost exceeding $860,000.00. An investigation by Fisher traced the pollution to Boise, Chesapeake, and Keystone.

Fisher initiated this action against Boise, Chesapeake, and Keystone under Sec. 107(a) of CERCLA, seeking to recover costs associated with cleaning up the cistern. Fisher also included a New Jersey common law negligence claim. Boise filed a motion for summary judgment, asserting that all claims against it were extinguished by the release it had obtained from Fisher. The district court granted Boise's motion, holding that the release barred Fisher's claims. The district court then entered an order under Fed.R.Civ.P. 54(b), stating that there was no just reason for delay, and directing that its order granting summary judgment in favor of defendant Boise be deemed a final judgment as to all claims and parties. Fisher appealed.

The district court had jurisdiction pursuant to 28 U.S.C. Sec. 1331 and 42 U.S.C. Sec. 9613(b). Our jurisdiction over this appeal rests on 28 U.S.C. Sec. 1291. We exercise plenary review over the district court's grant of Boise's motion for summary judgment. Public Interest Research of N.J., Inc. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 76 (3d Cir.1990), cert. denied, 498 U.S. 1109, 111 S.Ct. 1018, 112 L.Ed.2d 1100 (1991). The district court's decision to grant Boise's motion was proper only if "there [was] no genuine issue as to any material fact and ... [Boise was] entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Moreover, all inferences and facts must be viewed in a light most favorable to Fisher as the non-moving party. Sorba v. Pennsylvania Drilling Co., Inc., 821 F.2d 200, 202-03 (3d Cir.1987), cert. denied, 484 U.S. 1019, 108 S.Ct. 730, 98 L.Ed.2d 679 (1988).

II.

Fisher seeks to recover from Boise the response costs that it incurred in connection with the cistern. Fisher's claim is based on Sec. 107(a) of CERCLA, which authorizes both governmental and private entities to sue statutorily defined responsible parties to recover costs incurred in cleaning up hazardous waste disposal sites. Fisher correctly points out that Boise is a responsible person under Sec. 107(a)(2), which imposes liability on "any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of." Boise insists, however, that Fisher has released it from this liability, pointing to the general release it received at the time of the settlement agreement and to Sec. 107(e)(1) of CERCLA, which Boise reads as expressly authorizing agreements between private parties to allocate the risk of CERCLA liability between themselves. Section 107(e)(1) provides:

No indemnification, hold harmless, or similar agreement or conveyance shall be effective to transfer from the owner or operator of any vessel or facility or from any person who may be liable for a release or threat of release under this section, to any other person the liability imposed under this section. Nothing in this subsection shall bar any agreement to insure, hold harmless, or indemnify a party to such agreement for any liability under this section.

Six courts of appeals, including our own, have been called upon to interpret the seemingly inconsistent text of Sec. 107(e)(1). They have uniformly reconciled the first and second sentences by holding that responsible parties cannot contract away their liability under CERCLA for cleaning up a release, but that they may allocate the ultimate financial burden of that clean-up by agreements among themselves. Beazer East Inc. v. The Mead Corporation, 34 F.3d 206 (3d Cir.1994); Olin Corp. v. Consolidated Aluminum Corp., 5 F.3d 10, 14 (2d Cir.1993) ("private parties may contract with respect to indemnification and contribution" but "all responsible parties remain fully liable to the government"); John S. Boyd Co., Inc. v. Boston Gas Co.,...