McWane v. Crow Chicago Industrial, INC. & Halff Assoc.

• Decision Date: 12 September 2000
• Docket Number: No. 99-3819,99-3819
• Citation: 224 F.3d 582
• Parties: (7th Cir. 2000) McWane, Inc., Plaintiff-Appellant, v. Crow Chicago Industrial, Inc., and Halff Associates, Inc., Defendants-Appellees
• Court: U.S. Court of Appeals — Seventh Circuit

Page 582

224 F.3d 582 (7th Cir. 2000)

McWane, Inc., Plaintiff-Appellant, v. Crow Chicago Industrial, Inc., and Halff Associates, Inc., Defendants-Appellees.

No. 99-3819

In the United States Court of Appeals For the Seventh Circuit

Argued May 31, 2000

Decided August 9, 2000

Rehearing Denied September 12, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 C 84--Harry D. Leinenweber, Judge.

Before Flaum, Chief Judge, and Bauer and Harlington Wood, Jr., Circuit Judges.

Bauer, Circuit Judge.

In 1988, Crow Chicago Industrial, Inc. and McWane, Inc. entered into a limited partnership agreement to redevelop property located in Carol Stream, Illinois. The agreement included a Letter of Understanding regarding a due diligence investigation of the property. Crow hired Halff Associates, Inc., an environmental consulting firm, to conduct an environmental audit. On January 7, 1998, McWane filed suit against Crow and Halff to recover the cost of remediating the contamination of its property caused by the defendants' breach of contract and negligent and willful acts and omissions. On May 27, 1998, the district court dismissed McWane's claim against Crow for breach of an express written contract and for willful and wanton misconduct for failure to state a claim pursuant to Fed.R.Civ.P. 12 (b)(6). On October 1, 1999, the district court granted summary judgment in favor of Crow and Halff on McWane's remaining claims because the statute of limitations had run. McWane now appeals.

First, McWane argues that the district court improperly dismissed his complaint for breach of the Letter of Understanding. He contends that the Letter of Understanding imposed a duty on Crow to conduct an environmental investigation and a duty to remediate contamination. McWane contends that Crow breached the Letter of Understanding by creating "new and additional contamination by contaminating previously uncontaminated soils." The district court found that the Letter of Understanding did not impose a duty on Crow to remediate and found that no breach occurred.

We review 12(b)(6) dismissals de novo. Looper Maintenance Service Inc. v. City of Indianapolis, 197 F.3d 908, 911 (7th Cir. 1999). In a claim for breach of contract, the meaning of the contract "must be determined from the words or language used, and a court cannot place a construction on the contract which is contrary to the plain and obvious meaning of the language." Johnstowne Centre Partnership v. Chin, 99 Ill.2d 284, 287, 458 N.E.2d 480, 481 (1983). If the district court determines that the contract is unambiguous, it may determine its meaning as a matter of law. Meladax Corp. v. Uniden Corp., 863 F.2d 1331, 1333 (7th Cir. 1988). The unambiguous contract controls over contrary allegations in the plaintiff's complaint. Charles Hester Enter., Inc. v. Illinois Founders Ins. Co., 114 Ill.2d 278, 287, 499 N.E.2d 1319, 1323 (1986).

The Letter of Understanding provided that Crow shall have the right to conduct a due diligence investigation of the property involving any matters, "which in the sole discretion of Crow affect the development of the Land, including removal of underground storage tanks." The Letter further provided

If the environmental investigation/audit reveals that any one or more of the Tanks has been or is leaking, or reveals any other environmental contamination of the land, McWane shall have the option to remediate the contamination at its cost to the satisfaction of Crow, which remediation shall include any additional engineering expense which results from the contamination, but not the expense for removal of the Tanks, which shall be the Partnership's expense; or McWane may elect not to remediate such contamination, in which event it shall reimburse Crow for costs and expenses incurred by Crow in the environmental portion of the investigation.

The duty to remediate the contamination is clearly and unambiguously allocated to McWane, not Crow. The only option afforded McWane is how to handle the responsibility of the remediation, not whether McWane has the responsibility. At no point, does the Letter of Understanding impose a duty on Crow to conduct a due diligence investigation; it is only provided with the right to conduct such an investigation. Crow owes no duty under the contract regarding the due diligence investigation. The district court stated that while tortious conduct might have occurred, such conduct does not constitute a breach of the Letter of Understanding. We agree; the Letter of Understanding is unambiguous and the district court correctly dismissed the claim.

McWane next argues that the district court erred in granting Superior's motion for summary judgment on the remaining claims because the statute of limitations had run. Under Illinois law, "actions on unwritten contracts, expressed or implied, or on awards of arbitration, or...