Jordan v. Foust Oil Co., Inc.

• Decision Date: 06 September 1994
• Docket Number: No. 9315SC501,9315SC501
• Citation: 116 N.C.App. 155,447 S.E.2d 491
• Court: North Carolina Court of Appeals
• Parties: Wanda JORDAN, Christine Jordan, Paul Jordan, By and Through his Guardian ad litem Joel Winston, and Dianne Kehrle, Plaintiffs, v. FOUST OIL COMPANY, INC., Wilfred Phelps, and Nancy Phelps, Defendants.

Page 491

447 S.E.2d 491

116 N.C.App. 155

Wanda JORDAN, Christine Jordan, Paul Jordan, By and Through his Guardian ad litem Joel Winston, and Dianne Kehrle, Plaintiffs, v. FOUST OIL COMPANY, INC., Wilfred Phelps, and Nancy Phelps, Defendants.

No. 9315SC501.

Court of Appeals of North Carolina.

Sept. 6, 1994.

Berman & Shangler by Dean A. Shangler, Durham, for plaintiffs-appellants.

Coleman, Hillsborough, Gledhill & Hargrave by Kim K. Steffan and Mark T. Sheridan, Hillsborough, for defendants-appellees, Foust Oil Co., Inc. COZORT, Judge.

Since 30 March 1990, the Jordan family, plaintiffs herein, have lived in a home on N.C. Highway 86 North in Hillsborough. Beginning about 1983 defendants Wilfred and Nancy Phelps operated the Phelps Store, a convenience store-gas station-restaurant, located near the plaintiffs' home, where they sold gasoline pumped from underground gasoline storage tanks (UST's). There were five underground gasoline storage tanks at the Phelps Store and one pump island with three gasoline pumps. The defendant Foust Oil Company, Inc., transported gasoline by tanker truck to Phelps Store several times each week and filled Phelps Store UST's with gasoline. Foust also provided, maintained and serviced the gasoline pumps used at Phelps Store and conducted inventory control tests on Phelps Store UST's to detect possible leaks and shortages.

In early October of 1990, plaintiffs noticed their well water had a foul taste and smell. Plaintiffs contacted the Division of Environmental Management of the North Carolina Department of Environment, Health and Natural Resources (DEHNR). DEHNR took water samples from plaintiffs' well and their neighbors' wells. Gasoline was found in these samples. The state toxicologist tested plaintiffs' water and prepared a health risk evaluation of plaintiffs' well water which stated that the samples indicated extensive gasoline contamination. Specifically, the evaluation stated:

Benzene levels are 62 times the EPA MCL of 5 ppb, with high levels of other products detected. Benzene is a known human carcinogen. Any continued water use from this well for any purposes may pose a significantly increased long-term cancer risk. It is strongly recommended that all use of water from this well be discontinued immediately.

On 26 November 1990, DEHNR obtained soil samples from the Phelps Store property and, on 10 December 1990, confirmed a release of petroleum products from the Phelps Store UST's. Wilfred Phelps was notified of this and of his consequent violation of N.C.Gen.Stat. § 143-215.75 et. seq. On 10 December 1990, DEHNR also received results of tests done on additional water samples collected from plaintiffs' and plaintiffs' neighbors' wells. The results showed contaminant levels had risen dramatically over the dangerous levels found previously.

Foust made no further deliveries of gasoline to the Phelps Store after 15 November 1990, and in December of 1990 Foust removed the pumps from the Phelps Store. DEHNR later removed the Phelps Store UST's from the ground and discovered holes in the bottom of the largest tank. The investigator who removed and inspected the UST's stated:

[G]asoline was probably released from one or more [UST's] at Phelps Grocery beginning before October 31, 1990; that the constituents of gasoline found in water pumped from both the Jordan and Long wells in October, 1990, and thereafter were probably from gasoline released from the underground tank systems at Phelps Grocery; and that, as a result of the probable release of gasoline from the underground tank systems at Phelps Grocery, water drawn from the Jordan and Long wells was contaminated with constituents of gasoline, including benzene.

Plaintiffs discontinued drinking their well water after noticing the foul odor, but continued to use it for other purposes for several weeks, when they were informed of the significant health risk posed by their water and advised not to use their water for anything. Before they stopped using the water, plaintiffs suffered skin redness and irritation, headaches, nausea, and dizziness.

Plaintiffs sued Wilfred and Nancy Phelps and Foust Oil Company, Inc., in April 1991. None of the claims involving the Phelpses are before us. From this point on, "defendant" shall refer to Foust Oil Company, Inc. Plaintiffs alleged that Foust Oil Company violated the Oil Pollution and Hazardous Substances Control Act [OPHSCA]. Plaintiffs also alleged claims for trespass, infliction of emotional distress, unfair trade practice, and nuisance. Defendant answered in August of 1991 and moved for summary judgment on 10 July 1992. On 17 August 1992, plaintiffs took a voluntary dismissal on the claims of infliction of emotional distress. On 26 August 1992, Judge E. Lynn Johnson signed an order granting summary judgment for Foust on all "remaining claims." Plaintiffs appeal.

We first review the grant of summary judgment on the plaintiffs' claim for violation of OPHSCA. Summary judgment is proper when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C.Gen.Stat. § 1A-1, Rule 56(c) (1990). After reviewing the record, we conclude that there was a genuine issue of material fact as to whether Foust is liable under OPHSCA for delivering gas to the leaking tanks.

N.C.Gen.Stat. § 143-215.83 (1993), North Carolina's Oil Pollution and Hazardous Substances Control Act, states, in pertinent part:

It shall be unlawful, except as otherwise provided ... for any person to discharge, or cause to be discharged, oil or other hazardous substances into or upon any waters ... within this State, ... regardless of the fault of the person having control over the oil or other hazardous substances....

N.C.Gen.Stat. § 143-215.93 (1993) provides, in pertinent part:

Any person having control over oil or other hazardous substances which enters the waters of the State in violation of this Part shall be strictly liable, without regard to fault, for damages to persons or property ... caused by such entry....

Pursuant to § 143-215.77(8), gasoline is "oil." "Waters" is broadly defined under § 143-215.77(18) as: "any stream, river ... or any other body or accumulation of water, surface or underground, public or private, natural or artificial, which is contained within, flows through, or borders upon this State...." Thus, plaintiffs' well water constitutes "waters of the State" under § 143-215.93. The phrase "Having control over oil or other hazardous substances" is defined as:

"Having control over oil or other hazardous substances" shall mean, but shall not be limited to, any person, using, transferring, storing, or transporting oil or other hazardous substances immediately prior to a discharge of such oil or other hazardous substances onto the land or into the waters of the State, and specifically shall include carriers and bailees of such oil or other hazardous substances.

N.C.Gen.Stat. § 143-215.77(5).

The forecast of evidence showed that gas was transported from Foust's plant in Mebane to Phelps Store by tanker truck and pumped from the truck into the UST's. Gas from the store's UST's then entered groundwater drawn into plaintiffs' wells, resulting in injuries to plaintiffs' property and persons. There were five tanks with varying capacities. Defendant admitted that he delivered gasoline to certain UST's at the Phelps property, but defendant denied the existence of leaks in those UST's.

Plaintiffs deposed Foust's delivery man, Larry Poole. Mr. Poole stated that when he began delivering to Mr. Phelps, Mr. Phelps informed him that Tank 1 was leaking. Mr. Poole further testified that he made no deliveries to Tank 1. Mr. Poole also testified that in September 1989, he tested tanks 2 and 3, which were connected, and determined that there was a shortage in tanks 2 and 3 that could indicate a leak. He then informed Phelps of this and refused to make further deliveries to tanks 2 and 3. Thereafter, Mr. Poole made deliveries only to tanks 4 and 5.

To rebut Mr. Poole's testimony, plaintiffs presented invoices and loading tickets for deliveries made to Phelps, from which it could be inferred that Foust pumped gasoline into leaking tanks 1, 2, 3, or 5. The invoices showed the amount of gas and types of gas delivered to Phelps' UST's. On 26 September 1989, Foust delivered 2743 gallons of gas to tanks 2, 3, 4 and 5. Since the total available combined capacity of these tanks was 2500 to 2600 gallons, it is reasonable to infer that the remaining gallons were put into tank 1. On 30 September 1989, after Foust knew that tanks 2 and 3 had developed a shortage and were possibly leaking, Foust delivered 2560 gallons of gasoline to Phelps. Since tanks 4 and 5 had a combined capacity of 1500, the remaining 1069 gallons delivered on 30 September 1989 were, drawing inferences against movant Foust, pumped into tanks 1, 2, or 3, or some combination of the three. On 25 May 1990, 8 June 1990, and 29 June 1990, Foust pumped 1185, 1150, and 1100 gallons, respectively, of Exxon Plus into Phelps' tanks. Foust averred that since September 1989, Exxon Plus was delivered only to the 1000 gallon capacity tank 5, and that premium grade gasoline was put into tank 4 only. Drawing inferences from this evidence in favor of plaintiffs, on 25 May 1990, 8 June 1990, and 29 June 1990, Foust delivered some Exxon Plus into tanks 1, 2, or 3, or some combination thereof. On 20 September 1990, Foust delivered 250 gallons of Exxon Supreme, 900 gallons of Exxon Regular, and 650 gallons of Exxon Plus. Assuming that Foust, as it has sworn, delivered the Exxon Plus into the 1000 gallon tank 5 and the Exxon Supreme into 500 gallon tank 4, it may be inferred that on 20 September 1990 Foust put 900 gallons of Exxon Regular into some or all of tanks 1, 2, and 3.

We find...