Mercury Mall Associates v. Nick's Market, Inc.
| Decision Date | 03 November 2004 |
| Docket Number | No. CIV.A. 4:04CV80.,CIV.A. 4:04CV80. |
| Citation | 342 F.Supp.2d 515 |
| 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 |
Alan Dale Albert, LeClair Ryan PC, Norfolk, VA, for defendant.
Frank D. Gibson, Kingsport, TN, pro se.
Stephen W. Gibson, Knoxville, TN, pro se.
Douglas Edwin Miller, Patten Wornom Hatten & Diamonstein LC, Newport News, VA, for plaintiff
James Harrell Shoemaker, Jr., Patten Wornom Hatten & Diamonstein LC, Newport News, VA, for plaintiff.
John Carl Valdivielso, Kaufman & Canoles, Williamsburg, VA, for defendant.
John Carl Valdivielso, Kaufman & Canoles, Williamsburg, VA, pro se.
Presently before the Court are two separate Motions to Dismiss. The Court has reviewed briefing from the affected parties and heard oral arguments on both Motions on Tuesday, October 12, 2004. The issues involved are ripe for decision.
The first Motion to Dismiss, by Defendants Stephen Gibson and Frank Gibson, involves the question whether a lawsuit for damages allegedly sustained as a result of a dissolved corporation's conduct can be maintained against former officers of that corporation, or their representatives, as trustees in dissolution-the holders of a dissolved corporation's liquidated assets before they are distributed to bona fide creditors and/or shareholders-under Tennessee law. While the Tennessee Code only provides that shareholders of a dissolved corporation can be sued upon liquidation of its assets, Tennessee's court-made "trust fund doctrine" allows suits against trustees in dissolution. Thus, a suit against the former officers of a dissolved corporation, or their representatives, if they are properly alleged to be trustees in dissolution, is permitted. However, it is insufficiently pleaded in the Complaint.
The second Motion to Dismiss, by Defendant Nick's Markets, raises several issues. First, it presents the question whether a responsible party under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601, et seq., can maintain a cost recovery action pursuant to § 107(a) of that Act, 42 U.S.C. § 9607(a), against another potentially responsible party. CERCLA affords a responsible party no such lawsuit. Instead, a responsible party seeking relief from other potentially responsible parties must pursue it under CERCLA's contribution provision. This fact raises the core question presented by the second Motion: whether a CERCLA cost recovery action is a condition precedent to a contribution suit pursuant to § 113(f)(1) of that Act, 42 U.S.C. § 9613(f)(1). The Court holds that CERCLA imposes no such condition on contribution suits.
In addition, Nick's Markets' Motion raises issues concerning the availability of declaratory relief and attorney's fees. Declaratory relief remains available so long as the substantive claims underlying the lawsuit remain viable, which upon this Court's resolution of the instant Motion, they do. Attorney's fees, on the other hand, are not available under CERCLA. However, under limited circumstances, payments made to attorneys can comprise a portion of the necessary response costs apportioned among the responsible parties, but not the fees of this litigation.
We turn now to the particularities of the several, and at times involved, issues presented by the two Motions.
Plaintiff Mercury Mall Associates ("MMA") is a Virginia general partnership and is the current fee simple owner of real property in Hampton, Virginia, commonly referred to as the Mercury Mall Parcel ("the Parcel"), which is the subject of the instant lawsuit. From December 28, 1983, until the time it assumed the Parcel in fee simple on December 14, 1988, MMA possessed a leasehold interest pursuant to a Lease Agreement ("the Lease") with Defendant Nick's Markets.
Defendant Nick's Markets, Inc. ("Nick's") is a Virginia corporation. Nick's was the fee simple owner of the Parcel from January 3, 1961 to December 14, 1988.2 From December 28, 1983 until the time it sold the Parcel to MMA, Nick's operated a shopping center there in conjunction with MMA pursuant to the terms of the Lease. Nick's is believed by MMA to be a responsible party under CERCLA and hence liable for a proportionate share of response costs incurred to remedy environmental contamination on the Parcel.
Defendant Fashion Care Cleaners ("Fashion Care") is a Tennessee corporation that was dissolved in December 2001. Fashion Care operated a dry cleaning store under various trade names located in the shopping center on the Parcel from 1967 to December 2000. Fashion Care is believed by MMA to have contributed to environmental contamination on the Parcel and is thought to possess insurance coverage related to the claims that are the subject of the present litigation.
Finally, Defendant Stephen Gibson is co-executor of the estate of Mack B. Gibson, former President of Fashion Care. Defendant Frank Gibson is the former Vice President and Secretary of Fashion Care. The Estate and/or Trustees in Dissolution are believed to have information concerning Fashion Care's assets or applicable insurance coverage that might be available to satisfy the Plaintiff's claims.
Plaintiff MMA initiated the present suit in a Complaint dated June 22, 2004. A First Amended Complaint ("the Complaint") was subsequently filed on August 6, 2004. The Complaint alleges that throughout Fashion Care's operation of its store, from 1967 until it vacated the Parcel in December of 2000, it caused or contributed to the spilling, leaking, disposal and release of Tetrachloroethene, napthas, Stodard solvents, and other hazardous substances. MMA further claims that the spilling, leaking, disposal and release of hazardous chemicals contaminated the Parcel prior to the time that it entered into its partnership with Nick's on December 28, 1983. This, contends MMA, dramatically reduced the value of the Parcel prior to the time that it assumed a fee simple interest, for which there should have been a price adjustment in the Lease and/or a reduction in the eventual sale price it negotiated with Nick's. More significantly, and the grievance central to the present lawsuit, MMA claims that since purchasing the Parcel it has incurred environmental contamination response costs in an attempt to remedy the contamination and identify other responsible parties in accordance with the National Contingency Plan and the Virginia Department of Environmental Quality Voluntary Remediation Program.
MMA's Complaint seeks relief from Nick's, Fashion Care, and the Gibsons for costs related to the environmental contamination response effort it claims to have launched pursuant to CERCLA. Specifically, the Complaint levels three counts against all Defendants. Count One pleads a cost recovery action pursuant to CERCLA § 107(a), 42 U.S.C. § 9607(a). Count Two initiates a suit for contribution to environmental contamination response costs pursuant to CERCLA § 113(f)(1), 42 U.S.C. § 9613(f)(1). Finally, Count Three prays 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), and 28 U.S.C. § 2201. MMA indicates that it expects to proffer evidence that the total amount of its response and related costs exceeds $1.5 million, including attorney and other expert fees.
On August 23, 2004, Fashion Care filed an Answer to the Complaint. That same day, the Gibsons filed their Motion to Dismiss. Two days later, on August 25, 2004, Nick's filed its separate Motion to Dismiss. Both Motions, which seek dismissal of all Counts for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), are ripe for decision.
Federal Rule of Civil Procedure 12(b)(6) permits a party to move the court to dismiss an action if the plaintiff fails to state a claim upon which relief can be granted. The function of a motion to dismiss for failure to state a claim is to test the legal sufficiency of the complaint. Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). Dismissal is only appropriate if it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); see also Harrison v. United States Postal Serv., 840 F.2d 1149, 1152 (4th Cir.1988) (citation omitted) (reciting the standard for dismissal as a plaintiff's failure to proffer grounds for relief supported by "any legal theory which might plausibly be suggested by the facts alleged").
The court's consideration of a motion to dismiss is constrained by a presumption that the facts averred in the plaintiff's complaint are true and is further limited by a narrow scope of review, which can extend no further than the information contained in the parties' pleadings. Neitzke, 490 U.S. at 326-27, 109 S.Ct. 1827. Consequently, dismissal should only be ordered under "very limited circumstances." Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d 324, 325 (4th Cir.1989).
MMA's Complaint names Frank Gibson and Stephen Gibson as defendants in their alleged capacities as trustees in dissolution of...
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