Jones v. Texaco, Inc.

• Decision Date: 13 November 1996
• Docket Number: Civil Action No. H-96cv0015.
• Parties: Lloyd W. JONES, Edwin Lee Murray, Willard D. Sessions, Murray Gobert Trucking and Excavation, Inc., and General Truck Parts, Inc., Plaintiffs, v. TEXACO, INC., f/k/a The Texas Company, Defendant.
• Court: U.S. District Court — Southern District of Texas

Page 1037

945 F.Supp. 1037

Lloyd W. JONES, Edwin Lee Murray, Willard D. Sessions, Murray Gobert Trucking and Excavation, Inc., and General Truck Parts, Inc., Plaintiffs, v. TEXACO, INC., f/k/a The Texas Company, Defendant.

Civil Action No. H-96cv0015.

United States District Court, S.D. Texas.

November 13, 1996.

COPYRIGHT MATERIAL OMITTED

Dennis C. Reich, Reich & Binstock, Houston, Texas, for Plaintiffs.

Robert W. Jones and Greg W. Curry, Thompson & Knight, Dallas, Texas, Wendy S. Oatis, Washington, D.C., for Defendant.

MEMORANDUM AND ORDER

CRONE, United States Magistrate Judge.

Pending before the court is Defendant Texaco, Inc.'s ("Texaco") motion for partial summary judgment (# 11). Texaco seeks summary judgment on Plaintiffs Lloyd Jones ("Jones"), Edwin Lee Murray ("Murray"), Willard D. Sessions ("Sessions"), Murray Gobert Trucking and Excavation, Inc. ("Gobert"), and General Truck Parts, Inc.'s ("General Truck") claims of negligence, gross negligence, and strict liability, as well as their request for declaratory and injunctive relief, to the extent those requests are based on the common law. Plaintiff Murray voluntarily dismissed his action on October 18, 1996.

Having reviewed the motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that Texaco's motion for partial summary judgment should be granted.

I. Background

In November 1904, J.H. and Annie Koinm transferred to Texaco a parcel of land located in Humble, Harris County, Texas, commonly known today as the Humble Office and Industrial Park. From 1904 until 1969, Texaco operated an oil field waste disposal site on the property. During the period of its ownership, Texaco deposited oil sludge and various wastes into earthen pits dug on the property.

In March 1969, Texaco transferred the property to Hubert Vestal ("Vestal"). A clause in the deed recording this transfer references these sludge pits. The deed from Texaco to Vestal, dated March 28, 1969, specifically states:

there [are] located on said land multiple earthen pits containing oil sediment, water and various other wastes and substances, together with sundry excavations, junk and other objects.

The deed also provided that Vestal had inspected the property, was fully aware of the pits and residual oil, and accepted the land "as is." The deed confirms:

Grantee further acknowledges that he has conducted an on the ground inspection of said land and the above enumerated conditions and is familiar therewith and hereby accepts the risk of any and all conditions thereon, whether known or unknown at the date of this instrument.

In April 1969, Vestal sold the property to S. Miles Strickland III and Doyle Bond. In March 1970, Strickland transferred his portion to Boyd. In December 1977, Bond conveyed the property to Duane Pettyjohn. In January 1978, Pettyjohn sold the property to Houston Lighting and Power ("HL & P"). In August 1983, HL & P transferred the property to Humble Mini-Storage, Inc. From May through December 1985, Humble Mini-Storage transferred the property as separate lots to the plaintiffs.

When the plaintiffs purchased the properties, a layer of topsoil, asphalt, and, in some cases, structures concealed the pits where the various materials were deposited. Eventually, however, the wastes began to seep out of the ground and became apparent on the surface. The plaintiffs engaged an environmental engineering firm to perform an investigation consistent with the National Contingency Plan ("NCP") on August 22, 1994. The plaintiffs incurred response costs in compliance with the NCP for removal and remedial action.

According to the plaintiffs, they did not know of the contamination damage until after the results of the environmental testing became available in Fall 1994. They further assert that they did not learn of the impact the contamination had on their property values until the completion of an appraisal on September 14, 1995. At deposition, however, Plaintiff Jones admitted that he had observed oil contamination on his property in 1991 or 1992 when he brought fill in to cover residue on the ground. He also wrote a letter to R.W. Bambeck of General Truck, dated June 15, 1993, informing him that he would no longer pay rent for a portion of the property due to "area contamination." The record further reflects that in September 1993, General Truck protested its 1993 property tax evaluation by the Harris County Appraisal District on the basis that a lower assessed value of the land was warranted due to "contamination — (oil)." Moreover, at deposition, Bambeck, the president and owner of General Truck, admitted that he had received Jones's letter of June 15, 1993, in which Jones complained of "area contamination."

The plaintiffs initially filed suit in state court in Harris County, Texas, on December 6, 1995. In the petition, they alleged the following claims for relief:

1. Response costs pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq.;

2. Declaratory judgment stating that Texaco is liable to plaintiffs;

3. Mandatory injunction ordering Texaco to commence removal of wastes as remedial action to cure damage;

4. Preliminary injunction forcing Texaco to comply with any clean-up and remediation orders;

5. Common law negligence;

6. Gross negligence; and

7. Strict liability.

Texaco, however, had previously filed a voluntary Chapter 11 reorganization petition under the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. See Jointly Administered Chapter 11 Case Nos. 87-B-20142, 87-B-20143, and 87-B-20144. On March 23, 1988, the bankruptcy court confirmed Texaco's Second Amended Joint Plan of Reorganization, discharging Texaco from any and all claims arising before the date of confirmation. On January 4, 1996, Texaco removed this case to the United States District Court for the Southern District of Texas based on the relation of the claims to the previous bankruptcy proceeding. See 28 U.S.C. §§ 157, 1334, 1452(a). Removal was also authorized under this court's federal question jurisdiction based on the plaintiffs' CERCLA claims. See 28 U.S.C. §§ 1331, 1441(c).

On May 8, 1996, Texaco moved for partial summary judgment on the plaintiffs' state common law claims of negligence, gross negligence, and strict liability. Texaco contends that these claims are barred by the statute of limitations. Texaco further asserts that a purchaser of real property cannot maintain a tort claim against a prior owner for alleged contamination of the property before the subsequent purchaser acquired his interest in the property.

II. Analysis

A. Summary Judgment Standard

Rule 56(c) provides that "[summary] judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c). The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Williams v. Adams, 836 F.2d 958, 960 (5th Cir.1988). The moving party, however, need not negate the elements of the non-movant's case. Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir.1996); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc).

Once a proper motion has been made, the non-moving party may not rest upon mere allegations or denials in the pleadings, but must set forth specific facts showing the existence of a genuine issue for trial. Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. at 2552-53; Anderson, 477 U.S. at 257, 106 S.Ct. at 2514-15; Wallace, 80 F.3d at 1047; Little, 37 F.3d at 1075. The controverted evidence must be viewed in the light most favorable to the non-movant, and all reasonable doubts must be resolved against the moving party. Palmer v. BRG of Ga., Inc., 498 U.S. 46, 49 n. 5, 111 S.Ct. 401, 402 n. 5, 112 L.Ed.2d 349 (1990); Anderson, 477 U.S. at 255, 106 S.Ct. at 2513-14; Judwin Properties, Inc. v. United States Fire Ins. Co., 973 F.2d 432, 435 (5th Cir.1992). Nevertheless, neither "`conclusory allegations' nor `unsubstantiated assertions' will satisfy the non-movant's burden." Wallace, 80 F.3d at 1047 (quoting Little, 37 F.3d at 1075). Summary judgment is mandated if the non-movant fails to make a showing sufficient to establish the existence of an element essential to its case on which it bears the burden of proof at trial. Celotex Corp., 477 U.S. at 322, 106 S.Ct. at 2552. "In such situation, there can be `no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial." Id. at 323, 106 S.Ct. at 2552.

B. Statute of Limitations

1. The General Rule

"The purpose of the statutes of limitations is to compel the assertion of claims within a reasonable period while the evidence is fresh in the minds of the parties and witnesses." Computer Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455 (Tex.1996); see Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex.1990). "`Society's interest in repose is to have disputes either settled or barred within a reasonable time. It is based on the theory that the uncertainty and insecurity caused by unsettled claims hinder the flow of commerce.'" Computer Assocs. Int'l, Inc., 918 S.W.2d at 455 (quoting Safeway...