Garrett Well LLC v. The Frick-Gallagher Manufacturing Co., 012221 OHCA4, 19CA0012

Docket Nº19CA0012
Opinion JudgeJASON P. SMITH PRESIDING JUDGE.
Party NameGARRETT WELL LLC, Plaintiff-Appellant, v. THE FRICK-GALLAGHER MANUFACTURING COMPANY, ET AL., Defendant-Appellee.
AttorneyKristina S. Dahmann, Ice Miller LLP, Columbus, Ohio and Brent W. Huber, Ice Miller LLP, Indianapolis, Indiana, for Appellant Garrett Well LLC. Scott E. North, Porter, Wright, Morris & Arthur, LLP, Columbus, Ohio and Robert L. Joyce, Littleton Joyce Ughetta Park & Kelly LLP, Purchase, New York, fo...
Judge PanelAbele, J. and Hess, J. concur in Judgment and Opinion.
Case DateJanuary 22, 2021
CourtCourt of Appeals of Ohio

2021-Ohio-160

GARRETT WELL LLC, Plaintiff-Appellant,

v.

THE FRICK-GALLAGHER MANUFACTURING COMPANY, ET AL., Defendant-Appellee.

No. 19CA0012

Court of Appeals of Ohio, Fourth District, Jackson

January 22, 2021

Kristina S. Dahmann, Ice Miller LLP, Columbus, Ohio and Brent W. Huber, Ice Miller LLP, Indianapolis, Indiana, for Appellant Garrett Well LLC.

Scott E. North, Porter, Wright, Morris & Arthur, LLP, Columbus, Ohio and Robert L. Joyce, Littleton Joyce Ughetta Park & Kelly LLP, Purchase, New York, for Appellee Arrowood Indemnity Co. [1]

DECISION AND JUDGMENT ENTRY

JASON P. SMITH PRESIDING JUDGE.

{¶1} Garrett Well LLC ("Appellant") appeals the July 8, 2019 decision and order of the Jackson County Court of Common Pleas which found that Appellant had not met its burden of proof on its claims in an action against Arrowood Indemnity Co., ("Appellee"). The supplemental action was filed because Appellant sought reimbursement from Appellee for a default judgment granted for costs of environmental remediation which occurred at the Frick-Gallagher Manufacturing Company site in Wellston, Ohio. Having reviewed the record, we find no merit to Appellant's second assignment of error that the trial court erred by finding that the owned property exclusion applied to the facts of this case, thus barring coverage for Appellant's claims. As a result, Appellant's remaining assignments of error have been rendered moot and we decline to consider them. Accordingly, we overrule Appellant's second assignment of error and affirm the judgment of the trial court.

FACTS

{¶2} We draw heavily from the pretrial stipulations of the parties and the trial court's findings of fact. The trial court performed "yeoman's work" in sifting through the pleadings, testimony, and exhibits to reduce the facts and evidence presented in this case into a concise and complete 13-page decision and order.

{¶3} The Frick-Gallagher Manufacturing Company ("Frick"), owned a manufacturing business located in the center of the City of Wellston, Ohio. Frick conducted manufacturing operations from the 1930's until approximately 2004. Frick manufactured metal storage products for industrial use. During the manufacturing process, Frick used chemicals as part of its cleaning process.

{¶4} When Frick closed its business, the property was abandoned. The buildings descended into disrepair and the factory site became a danger and an "eyesore." According to the testimony of City Engineer, Timothy Wojdacz, City of Wellston (hereinafter "City" or "Welston") took pro-active steps to remediate the site. The City began by exploring the "Clean Ohio Program" as a source of funding.2 The City also obtained ownership of the property so it could access the funding for the remediation process. Wellston eventually participated in a Voluntary Action Plan ("VAP.") The VAP program allows a site owner to conduct a voluntary cleanup of the site and then have the cleanup results reviewed. The goal of the VAP process is to obtain two documents as proof that the site is clean and able to be developed: a "no further action letter" (NFA) from the federal and state environmental protection agencies (EPA); and a covenant not to sue from the federal EPA. The City obtained both documents.

{¶5} The VAP process required investigation of the Frick site through a sampling and evaluation process in order to obtain a detailed understanding of environmental concerns of the site. The investigation assists in determining what actions must be taken in order to bring the property up to federal and state environmental regulations. The City of Wellston hired Keramida, an environmental health and safety consulting company which conducted the site evaluation. During a two-year period in which Keramida conducted soil and water sampling, the investigation uncovered contamination in the buildings at the site, the building materials, and in the soil and groundwater. Keramida issued a report of its findings. Keramida found that in manufacturing metal bins, which required cleaning and bending of metal and painting operations, there were paint-related wastes on the site. Chemicals of concern ("COC's) found at the site included dioxin, a highly toxic compound produced as a byproduct of industrial processes, asbestos, and trichloroethylene (TCE), a chlorinated solvent. Keramida billed Wellston for its services.

{¶6} Thereafter, Wellston entered into a partnership with Appellant to remediate the site in accordance with the VAP. Appellant paid 25% of the remediation costs. Government funding provided the remainder of the remediation costs. Keramida also conducted the site remediation.[3] The groundwater contamination was treated by injecting a solution into the soil and groundwater to degrade the chlorinated solvent, TCE.4 Additional work was performed to excavate impacted soil from the site and to demolish and dispose of impacted building materials. Underground storage tanks were also removed from the site.

{¶7} After the State of Ohio and the City of Wellston took steps to remediate the contamination at the Frick site, the entities assigned their rights to pursue an action for reimbursement of remediation costs to Appellant. Appellant filed an action styled Garrett Well LLC v. The Frick-Gallagher Manufacturing Co., Jackson County Case No. 13CIV0140. As previously set forth, the Frick site was abandoned after 2004. The Frick Company was defunct and did not appear or defend the suit. The Jackson County Court of Common Pleas eventually entered a default judgment in favor of Appellant in the amount of $1, 351, 911.90. Pursuant to R.C. 3929.06(B), Appellant thereafter filed the current action against Appellee and Firemen's Fund Insurance Company of Ohio, former insurers of Frick, for the events which gave rise to the default judgment.[5]

{¶8} Appellee filed an Answer to the Complaint, asserting among other affirmative defenses, two policy exclusions. Appellee claimed the policy excluded coverage for pollution, unless such pollution is found to be "sudden and accidental." Appellee also claimed the policy excluded coverage for property owned by Frick. The parties engaged in motion practice and the trial court denied Appellant's motion for summary judgment. The matter then proceeded to a bench trial. In the parties' pretrial stipulations, the parties stipulated to the accuracy and admissibility of the applicable commercial general liability policies, the policy numbers, the policy limits, and the relevant dates of coverage. The parties agreed the focus date of claims was between 1981-1985.

{¶9} At the bench trial, Appellant called Michael Heitz, one of the three members of Garrett Well LLC (Appellant). Mr. Heitz testified Garrett Well was formed in 2010 to acquire contaminated properties and to take advantage of Clean Ohio Funds to remediate the contaminated properties through the VAP process. He testified that Garrett Well retained Keramida to perform the remediation work at the Frick site.

{¶10} During Mr. Heitz testimony, Appellant attempted to introduce a document known as the "Avendt report." The report came from Appellee's (formerly "Royal Insurance's") claims' file. The Avendt report was an environmental report prepared by the Avendt Group, Inc. The report, dated May 1990, documented an investigation into dioxin contamination at the Frick plant. Appellee's counsel objected to the admissibility of the report. The trial court reserved ruling on the matter until the court had heard evidence of the report's relevancy.

{¶11} Heitz testified that after the remediation of the Frick site was completed, Garrett Well received the NFA letter and the covenant not to sue. Unfortunately, Heitz and the other members of Garrett Well were unable to find a buyer or a project for the Frick site. Appellant subsequently donated the property back to the City of Wellston.

{¶12} Appellant also played the video deposition of Michael May, a senior engineer with Keramida. Mr. May testified he had a bachelor's degree in chemical engineering, along with 30 years of environmental experience in consulting and research. May testified he was a C.P. pursuant to the Ohio VAP program. He became the C.P. of record for the Frick project late in the process, in October 2013, and therefore, his testimony regarding knowledge of the project would be from his review of Keramida files.

{¶13} Mr. May testified that Keramida collected and analyzed soil samples. These samples demonstrated that chlorinated compounds were found in the groundwater at the Frick site. There were also RCRA metals in the soil.[6] The remedial action plan was to excavate the soil and remove the soil that was deemed contaminated.

{¶14} May also testified polychlorinated byphenyles (PCB's) were located in the concrete flooring.[7] All the PCB-related remediation involved the removal of impacted concrete.

{¶15} Mark May also testified that Keramida did not determine how the COC's came onto the site. Keramida's reports suggested that much of the "fill material" associated with the Frick property, material widespread throughout the site, contained the contaminants. Mr. May did not know the source of the fill material and the Keramida records did not speculate on the source of the fill. May also testified that there was not another source for the COC's, other than fill material which was identified in the Keramida records. May testified it was very difficult to determine the nature of a release of contaminants into the environment. Keramida records did not have sufficient information. He would be speculating on the nature of the release, whether it was sudden or acute. He also did not recall seeing any information in Keramida's records about any explosions.

{¶16}...

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