Mercury Mall Associates, Inc. v. Nick's Market

• Decision Date: 28 February 2005
• Docket Number: No. CIV.A. 4:04CV80.,CIV.A. 4:04CV80.
• Citation: 368 F.Supp.2d 513
• Parties: MERCURY MALL ASSOCIATES, INC., a Virginia Corporation, Plaintiff, v. NICK'S MARKET, INC., a Virginia Corporation, and FASHION CARE CLEANERS, INC., a Tennessee Corporation, and Stephen GIBSON, trustee in dissolution of Fashion Care Cleaners, Inc., and Frank GIBSON, trustee in dissolution of Fashion Care Cleaners, Inc. Defendant.
• Court: U.S. District Court — Eastern District of Virginia

368 F.Supp.2d 513

MERCURY MALL ASSOCIATES, INC., a Virginia Corporation, Plaintiff, v. NICK'S MARKET, INC., a Virginia Corporation, and FASHION CARE CLEANERS, INC., a Tennessee Corporation, and Stephen GIBSON, trustee in dissolution of Fashion Care Cleaners, Inc., and Frank GIBSON, trustee in dissolution of Fashion Care Cleaners, Inc. Defendant.

No. CIV.A. 4:04CV80.

United States District Court, E.D. Virginia. Newport News Division.

February 28, 2005.

COPYRIGHT MATERIAL OMITTED

Douglas Edwin Miller, Patten Wornom Hatten & Diamonstein LC, James Harrell Shoemaker, Jr., Patten Wornom Hatten & Diamonstein LC, Newport News, VA, for Mercury Mall Associates, Plaintiff.

Alan Dale Albert, LeClair Ryan PC, Norfolk, VA, for Nick's Markets, Inc., Fashion Care Cleaners, Inc., Frank D. Gibson, Stephen W. Gibson, Defendants.

Brian L. Buniva, LeClair Ryan PC, Richmond, VA, for Nick's Markets, Inc., Defendant.

John Carl Valdivielso, Kaufman & Canoles, Williamsburg, VA, for Fashion Care Cleaners, Inc., Frank D. Gibson, Stephen W. Gibson, Defendants.

MEMORANDUM OPINION AND ORDER

DOUMAR, District Judge.

On November 3, 2004, this Court issued a Memorandum Opinion and Order granting in part and denying in part a motion to dismiss filed by Defendant Nick's Markets, Inc. See Mercury Mall Assoc., Inc. v. Nick's Market, Inc., 342 F.Supp.2d 515 (E.D.Va.2004). A recent opinion by the United States Supreme Court, Cooper Industries v. Aviall Services, Inc., 543 U.S. ___, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004), has shed new light on a previously unsettled question of law that was pivotal to that decision. Consequently, Defendants have filed a motion for reconsideration and judgment on the pleadings pursuant to Federal Rules of Civil Procedure 54(b) and 12(c). Plaintiff opposes the motion but, in the event that it must be granted, moves for leave to amend its complaint or, in the alternative, requests voluntary dismissal pursuant to Federal Rules of Civil Procedure 15(a) and 41(a)(2). For the reasons that follow, both Defendants' motion for reconsideration and judgment on the pleadings, and Plaintiff's motion for leave to amend or alternatively for voluntary dismissal, are GRANTED IN PART, subject to explanation to follow.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

The substantive facts bringing rise to this litigation are adequately set forth in this Court's Memorandum Opinion and Order of November 3, 2004. See Mercury Mall Assoc., Inc. v. Nick's Market, Inc., 342 F.Supp.2d 515, 519-20 (E.D.Va.2004). By way of summary, Plaintiff Mercury Mall Associates ("MMA") is the current fee simple owner of real property in Hampton, Virginia, commonly referred to as the Mercury Mall Parcel (the "Parcel"). At some point in time between 1967 and the present, the Parcel allegedly became contaminated by the spilling, leaking, disposal, and release of Tetrachloroethene, napthas, Stodard solvents, and other hazardous substances. As the present fee simple owner of the Parcel, MMA is considered a potentially responsible party ("PRP") for that environmental contamination under the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). 42 U.S.C. § 9601, et. seq; see id. § 9607(a) (defining the class of persons potentially liable for environmental contamination under CERCLA). The general basis for the lawsuit is MMA's contention that Defendants Nick's Markets, Inc. ("Nick's") and Fashion Care Cleaners, Inc. ("Fashion Care"), as former owner and leaseholder of the Parcel respectively, are also PRPs and therefore must bear some portion of the costs required to respond to the environmental contamination. MMA further alleges that Defendants Stephen Gibson and Frank Gibson (the "Gibsons") are trustees in dissolution of Fashion Care and, to the extent they received assets from the dissolved corporation, are responsible for Fashion Care's liabilities.

B. Procedural Posture

The original complaint was filed on June 22, 2004. A first amended complaint containing three counts against each Defendant was subsequently filed on August 6, 2004. Count one of the first amended complaint pled a cost recovery action pursuant to CERCLA § 107(a), 42 U.S.C. § 9607(a) (" § 9607(a)"). Count two contained a plea for contribution to environmental contamination response costs pursuant to CERCLA § 113(f)(1), 42 U.S.C. § 9613(f)(1) (" § 9613(f)(1)"). Count three prayed for a declaration that the Defendants are liable for their proportionate share of all past, present, and future response and related costs that may be incurred due to the Parcel's environmental contamination pursuant to CERCLA § 113(g)(2), 42 U.S.C. § 9613(g)(2) (" § 9613(g)(2)"), and 28 U.S.C. § 2201. Finally, as damages, the first amended complaint prayed for "each Defendants' proportionate share of all response costs and other costs incurred by the Plaintiff in connection with delineating and remediating environmental. contamination at the property including the recoverable portion of any attorney's fees." Pl.'s First Am. Compl., Ad Damnum Cl. ¶ 1.

On August 23, 2004, Fashion Care answered the first amended complaint. That same day, the Gibsons filed a motion to dismiss on the ground that Tennessee law, under which Fashion Care was organized and ultimately dissolved, did not afford a creditor of a dissolved corporation a cause of action against trustees in dissolution. In the November 3, 2004 Memorandum Opinion and Order, this Court held that MMA had committed what amounted to a pleading error and granted it fourteen days to amend the complaint to state a viable cause of action against the Gibsons consistent with the constraints of Tennessee law. See Mercury Mall, 342 F.Supp.2d at 521-24. MMA filed a second amended complaint on November 15, 2004, to which the Gibsons have not renewed their objection on Tennessee law grounds.

On August 25, 2004, Nick's filed a motion to dismiss each of the three counts contained in the first amended complaint. First, Nick's contended that MMA could not sustain either an implied contribution suit or a cost recovery action pursuant to § 9607(a) because one PRP cannot sue another PRP under that provision. This Court agreed and accordingly dismissed count one of the first amended complaint. See Mercury Mall, 342 F.Supp.2d at 524-26. Second, Nick's contended that MMA could not bring a suit for contribution towards environmental contamination response costs pursuant to § 9613(f)(1) without first being subject to a cost recovery action under § 9606 or § 9607. This Court disagreed and consequently denied the motion with regard to count two. See id. at 526-30. Third, Nick's argued that MMA's claim for declaratory relief pursuant to § 9613(g)(2) should be dismissed. Dismissal of count three would only have been appropriate had the Court dismissed both counts one and two. Therefore, Nick's motion to dismiss count three was denied. See id. at 530. Finally, Nick's motion to dismiss argued that attorney's fees are not available in CERCLA litigation. While it is the case that attorney's fees are not generally available in cases brought pursuant to CERCLA, the Court held that, in the highly limited circumstance where fees comprise necessary environmental cleanup costs, they may be available. See id. at 530-31. Nick's motion to dismiss MMA's plea for "the recoverable portion of any attorney's fees" was therefore also denied.

Following this Court's November 3, 2004 Memorandum Opinion and Order, on November 15, 2004, MMA filed a second amended complaint. The second amended complaint alleges the exact same counts against each Defendant. The only substantive change contained in the second amended complaint involves newly alleged facts that state a viable cause of action against the Gibsons as trustees in dissolution of Fashion Care. Additionally, since then the United States Supreme Court decided an issue pivotal to this Court's November 3, 2004 Memorandum Opinion and Order. See Cooper Indus. v. Aviall Serv., Inc., 543 U.S. ___, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004), hereinafter, Aviall.

Due to what the Defendants view as redundant pleading, and due further to the Supreme Court's opinion in Aviall, Nick's filed a motion for reconsideration and judgment on the pleadings on December 15, 2004. On December 23, 2004, Fashion Care and the Gibsons filed a separate motion for reconsideration and judgment on the pleadings setting forth the same reasons as those contained in Nick's motion. Consequently, these motions are considered together as a single motion. Defendants contend that count one of the second amended complaint should be dismissed because it merely restates the same theory of recovery that this Court dismissed on November 3, 2004. Defendants further argue that count two should be dismissed based on Aviall, in which the Supreme Court held that a cost recovery action is a condition precedent to a suit for contribution under CERCLA. 125 S.Ct. at 584. Finally, Defendants contend that count three should be dismissed because declaratory relief is only available if the controversies alleged in counts one or two remain live. MMA opposes the motion but, in the event that it must be granted, moves this Court to grant it leave to amend its complaint or, in the alternative, requests voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a)(2).

The Court has considered the memoranda of law submitted by the parties and entertained oral argument on February 16, 2005. The motions of both Plaintiff and Defendants are therefore ripe for judicial resolution.

II. STANDARD OF REVIEW

A. Motion for Reconsideration and Judgment on the Pleadings

District courts are authorized to revise prior orders "which adjudicate[] fewer than all the claims or the rights and liabilities of fewer than all the parties ..." Fed.R.Civ.P. 54(b). Such prior orders are "subject to revision at any time before the entry of judgment adjudicating all the claims and...