Forest City Enterprises, Inc. v. Leemon Oil Co., Docket Nos. 177520
| Citation | 577 N.W.2d 150,228 Mich.App. 57 |
| Decision Date | 10 February 1998 |
| Docket Number | Docket Nos. 177520,187676 |
| Parties | FOREST CITY ENTERPRISES, INC., and Nationwide Insurance Company, Plaintiffs/Appellants-Cross-Appellees, v. LEEMON OIL COMPANY, Defendant/Appellee-Cross-Appellant. FOREST CITY ENTERPRISES, INC., and Nationwide Insurance Company, Plaintiffs-Appellants, v. LEEMON OIL COMPANY, Defendant-Appellee. |
| Court | Court of Appeal of Michigan (US) |
Mason, Steinhardt, Jacobs & Perlman, Professional Corporation by Jonathan B. Frank, Southfield, and Law Offices of Richard A. Barr by Richard A. Barr, Bingham Farms, for Plaintiffs.
Pedersen, Keenan, King, Wachsberg & Andrzejak by Daniel P. King, Farmington Hills, for Defendant.
Before SAAD, P.J., and O'CONNELL and M.J. MATUZAK *, JJ.
In this environmental cleanup dispute between a commercial landlord and tenant, the landlord, Forest City Enterprises, Inc., and its insurer, Nationwide Insurance Company (hereafter Forest City) appeal from certain rulings by the trial court, and the tenant, Leemon Oil Company cross appeals. We consolidated the appeals and affirm in all respects.
Forest City was the proprietor of a parcel of commercial real estate in Macomb County that, for at least twenty-five years, was used by a retail dry cleaner and an adjacent gas station. Although different companies occupied the gas station over the twenty-five-year period, defendant Leemon Oil leased the gas station from March 1, 1982, until December 1985.
In 1988, a routine environmental assessment of the property revealed two types of contamination in the subsurface soils and groundwater: "BTEX" (gasoline contaminants, benzene, toluene, ethylbenzene, and xylene) and chlorinated solvents (associated with the dry-cleaning process). (At trial, there was evidence presented that, before 1990, Forest City had not told the dry cleaner that disposal was by septic tank [rather than sewer] and therefore the dry cleaner had been discharging chlorinated solvents through a septic tank and field system.)
Upon discovery of the contamination, Forest City undertook a massive cleanup.
In 1990, Forest City filed this claim against its former tenant, Leemon Oil. Forest City's complaint alleged that on August 11, 1983, a Leemon Oil tanker spilled about 2250 gallons of gasoline in the immediate area of its gas pumps, causing the whole or a substantial part of the contamination at the site. In response, Leemon Oil admitted the existence of a spill, but alleged that its agent had adequately cleaned up the spill in 1983.
Following amendments, Forest City eventually asserted five common-law theories against Leemon Oil (breach of lease contract, waste, nuisance, indemnity, and trespass), and three statutory claims. 1 Pursuant to special verdict forms, the jury found that Leemon Oil did not breach its lease or commit waste, but that it created a nuisance on land that was not part of the leased land. (The indemnity claim was tried with the breach of contract claim and the jury found no liability.) The trial court ultimately concluded that the nuisance claim was barred by the three-year statute of limitations.
For reasons not clear in the record, the only statutory claim that was tried was the MERA claim, and with regard to that claim the jury found that Forest City's damages were $1,399,501 but that 95.5 percent of the damages were attributable to Forest City's own negligence. 2 Following supplemental proceedings regarding Forest City's MERA claim, the trial court found that Leemon Oil should contribute a total of $6,927 under the MERA for the cleanup costs. Accordingly, the trial court entered a judgment of no cause of action for the waste and contract claims and for $6,927 for the MERA claim.
Leemon Oil thereafter moved for costs and mediation sanctions, while Forest City moved for a new trial, judgment notwithstanding the verdict, amended findings of the trial court, and an amended judgment. Leemon Oil was awarded $98,000 in mediation sanctions on May 15, 1995. This appeal and cross appeal followed.
Forest City asserts that the trial court erred in its interpretation of the MERA in concluding as a matter of law that the BTEX contamination was "divisible" from the chlorinated solvent contamination. According to Forest City, because the property was contaminated by Leemon Oil and the dry cleaners, § 12c of the MERA, M.C.L. § 299.612c; M.S.A. § 13.32(12c), requires the trial court to determine if the two contaminating substances were divisible or indivisible. Forest City submits that the contaminants were intermingled and indivisible. Thus, because Leemon Oil caused some or all of the "indivisible" contamination, Forest City contends that Leemon Oil should be jointly and severally liable with the dry cleaners for the entire $1.4 million, subject to Leemon Oil's contribution rights under subsection 12c(3).
We find no merit to this argument, for multiple reasons. As a threshold matter, Forest City's argument incorrectly assumes that contamination must have been caused by either Leemon Oil or the dry cleaner. However, Leemon Oil was not the only tenant of the gas station. At trial, issues pertaining to who caused the contamination, when the contamination occurred, and who should be responsible for the contamination were hotly disputed.
Moreover, Forest City's argument also incorrectly assumes that it should bear no fault for any portion of the spill. Forest City's principal argument concerning divisibility is one of statutory construction. Therefore, our primary goal is to ascertain and give effect to the Legislature's intent. Haworth, Inc. v. Wickes Mfg. Co., 210 Mich.App. 222, 227, 532 N.W.2d 903 (1995). A court must look to the object of a statute and the harm that it is designed to remedy and strive to apply a reasonable construction to accomplish the purpose of the statute. In this endeavor, we should not abandon the canons of common sense. Marquis v. Hartford Accident & Indemnity (After Remand) 444 Mich. 638, 644, 513 N.W.2d 799 (1994).
At the time the trial court heard this matter, § 12c of the MERA 3 provided, in relevant part:
(1) If 2 or more persons acting independently cause a release or threat of release that results in response activity costs, or damages for injury to, destruction of, or loss of natural resources, and there is a reasonable basis for division of harm according to contribution of each person, each person is subject to liability under section 12 only for the portion of the total harm that the person caused. However, a person seeking to limit its liability on the ground that the entire harm is capable of division shall have the burden of proof as to the divisibility of the harm and as to the apportionment of liability.
(2) If 2 or more persons cause or contribute to an indivisible harm that results in response activity costs, or damages for injury to, destruction of, or loss of natural resources, each person is subject to liability under section 12 for the entire harm.
(3) A person may seek contribution from any other person who is liable or may be liable under section 12 during or following a civil action brought under this act. However, a person that is participating in the allocation process described in section 11f or 11g shall not be subject to a contribution action during the pendency of that allocation process. This subsection shall not diminish the right of a person to bring an action for contribution in the absence of a civil action by the state under this act. The court shall consider all of the following factors in allocating response activity costs and damages among liable persons:
(a) Each person's relative degree of responsibility in causing the release or threat of release.
(b) The principles of equity pertaining to contribution.
(c) The degree of involvement of and care exercised by the person with regard to the hazardous substance.
(d) The degree of cooperation by the person with federal, state, or local officials to prevent, minimize, respond to, or remedy the release or threat of release.
(e) Whether equity requires that the liability of some of the persons should constitute a single share. [Emphasis added].
Subsection 12c(1) provides for severing liability when the harm is divisible; subsection 2 provides the alternative of holding persons jointly and severally liable when there is indivisible harm. The essence of Forest City's position seems to be that Leemon Oil and the dry cleaners should be held jointly and severally liable for an indivisible harm because Leemon Oil did not meet its burden under subsection I to show divisible harm. However, Forest City has misconstrued the trial court's analysis: the trial court did not find that Leemon Oil was severally liable under subsection 1, but rather treated the Forest City claim against Leemon Oil as one for contribution under subsection 3.
The flaw in Forest City's argument is its assumption that it can shift all of its recovery costs to Leemon Oil if there is indivisible harm. This position is indefensible because it was disputed at trial whether Forest City itself caused or contributed to the harm, and it is apparent from the trial court's findings that it attributed some fault to Forest City (although the court did not find that either Forest City or Leemon Oil acted deliberately).
Further, while Forest City places great emphasis on the question of who caused the contamination, we note that the "indivisible" harm provision for joint and several liability in subsection 12c(2) uses the phrase "cause or contribute " (emphasis added). There is ample basis in the record to support the trial court's finding that Forest City contributed to the "indivisible harm" for purposes of § 12c and, hence, is itself jointly and severally liable. Common sense dictates that the...
To continue reading
Request your trial
-
Pitsch v. ESE Michigan, Inc.
...action. See, e.g., Port Huron v. Amoco Oil Co., Inc., 229 Mich.App. 616, 583 N.W.2d 215 (1998), and Forest City Enterprises, Inc. v. Leemon Oil Co., 228 Mich.App. 57, 577 N.W.2d 150 (1998). In Amoco Oil, supra at 620, 583 N.W.2d 215, however, this Court commented on the issue in Before the ......
-
Terlecki v. Stewart
...Power Co., 234 Mich. App. 72, 81-82, 592 N.W.2d 112 (1999) (trespass and nuisance); and Forest City Enterprises, Inc. v. Leemon Oil Co., 228 Mich.App. 57, 76 n. 7, 577 N.W.2d 150 (1998) (nuisance). But also see Traver Lakes Community Maintenance Ass'n, supra at 346-348, 568 N.W.2d 847 (appl......
-
Ronnisch Constr. Grp., Inc. v. Lofts On the Nine, LLC.
...of costs), courts have held that recovery of the full amount of damages is unnecessary. See Forest City Enterprises, Inc. v. Leemon Oil Co., 228 Mich.App. 57, 81, 577 N.W.2d 150 (1998). Instead, “in order to be considered a prevailing party, that party must show, at the very least, that its......
-
Angott v. Chubb Group Ins.
...of action alleged, the party who prevails on the entire record is deemed the prevailing party. In Forest City Enterprises, Inc. v. Leemon Oil Co., 228 Mich.App. 57, 81, 577 N.W.2d 150 (1998), this Court, in determining whether a party was a prevailing party under MCR 2.625, The fact that [a......