N.C. Corff Partnership, Ltd. v. OXY USA, Inc.
Citation | 1996 OK. CIV. APP. 92,929 P.2d 288 |
Decision Date | 30 July 1996 |
Docket Number | Nos. 86604,No. 4,86605,s. 86604,4 |
Parties | 1996 OK CIV APP 92, 136 Oil & Gas Rep. 111 N.C. CORFF PARTNERSHIP, LTD., Virginia Ruth Corff, John C. Corff, Richard G. Corff, Alice Louise Corff McGuire and Barbara Marie Corff Carter, Individually and as General Partners of N.C. Corff Partnership, Ltd., Appellants, v. OXY USA, INC., Appellee. Court of Appeals of Oklahoma, Division |
Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
Robert N. Barnes, Patranell Britten Lewis, Barnes, Smith & Lewis, P.C., Oklahoma City, for Appellants.
Steven J. Adams, J. Randall Miller, Gardere & Wynne, L.L.P, Tulsa, for Appellee.
Plaintiffs appeal from the trial court's grant of summary judgment to Defendant, OXY USA, Inc. (OXY), in this action for alleged pollution of groundwater by OXY's operation of oil and gas wells on or near Plaintiffs' property. Plaintiffs also seek review of the trial court's ruling dismissing the general partners of N.C. Corff Partnership, Ltd. (Partnership) as parties to the case. We reverse and remand.
Plaintiffs filed this action on April 23, 1992, seeking an injunction and damages based on theories of recovery sounding in public and private nuisance, trespass, restitution (unjust enrichment), and constructive fraud. In addition to Partnership, the original plaintiffs included Partnership's five general partners, Virginia Ruth Corff (who also is managing partner), John C. Corff, Richard G. Corff, Alice Louise Corff McGuire, and Barbara Marie Corff Carter (collectively, "Partners"). The petition alleged OXY, a former oil and gas lessee, had operated wells on property owned by Plaintiffs or adjacent thereto, and that OXY had either improperly operated or improperly plugged the wells, resulting in elevated levels of chloride compounds in groundwater underlying land owned by Partnership. 1
It is undisputed that the property in question is now, and has been for many years, operated as an industrial park that has been the site of industrial operations that do not include heavy manufacturing. Tenants of the park have included a number of oilfield service companies, including a company known as Homco International, Inc./NL ACME Tool Operations (Homco). From 1927 to 1990, OXY or its predecessor in interest operated a number of oil and gas wells on or near Partnership's property.
By letter dated May 24, 1990, Homco informed Partnership that it had discovered elevated levels of lead, barium, and chromium in the soil of the property it leased, as well as high concentrations of diesel oil in the soil in certain areas. Homco also stated, however, that it had discovered no evidence of groundwater contamination in the environmental audit that had revealed the other contamination.
Though OXY disputes the date when Plaintiffs should have learned of the alleged saltwater contamination, Plaintiffs produced evidence supporting their claim that they did not know the groundwater under the property had been contaminated until August 1991, when elevated chloride levels were measured from a monitoring well drilled by Homco. Since that time, Homco apparently has remediated at least a portion of the property it leased. Plaintiffs assert Homco's actions have not damaged the groundwater in any respect. Plaintiffs also have installed a number of additional monitoring wells, which, according to their experts' deposition testimony and test results, show chloride levels higher than originally indicated, as well as groundwater contamination that could only have come from oilfield operations.
Following extensive discovery, OXY filed two separate motions for summary judgment. The first motion asserted the individual Partners were not proper parties to the action because they lacked cognizable claims for damage allegedly done to property owned by Partnership. 2 OXY's second motion sought judgment on the merits of Partnership's claim, asserting the undisputed facts showed OXY could not be liable as a matter of law. The trial court granted both motions. Plaintiffs have appealed. 3
OXY's first summary judgment motion asserted Partners did not have legal standing--either as individuals or as general partners--to assert claims against OXY for damage to property owned by Partnership. It points to undisputed facts showing that title to the surface was solely in Partnership's name, and that Partners owned no interest in the property as individuals. The trial court agreed with this argument. We do not, finding instead that Partners are entitled to bring this action as a matter of law.
We note, first, that a trial court may grant summary judgment only if the record presented--viewed in favor of the party opposing the motion--reveals uncontroverted material facts failing to support any legitimate inference in favor of that party. First Nat'l Bank and Trust Co. of Vinita v. Kissee, 859 P.2d 502 (Okla.1993). The movant must also be entitled to judgment as a matter of law.
Here, it is undisputed that Partners are general partners, and that Partnership is the sole surface owner. It also is undisputed that Partners have personally guaranteed certain debts of Partnership. Under Oklahoma law, management responsibility for limited partnerships falls upon the entity's general partners, who ultimately also are held liable individually to third persons for the debts and liabilities of the partnership. See 54 O.S.1991 §§ 150, 215, and 325. Determining rights and liabilities concerning alleged contamination of Partnership property, its cause, and its abatement, necessarily involves adjudicating rights and liabilities of Partnership, which also may be subject to liability for maintaining a nuisance due to its status as a property owner. 50 O.S.1991 § 5. Because of the general partners' ultimate liability for Partnership's liabilities, they have an interest in participating in proceedings in which those liabilities are being determined.
OXY's argument that Oklahoma statutes and case law preclude Partners from participating as plaintiffs in this action is misplaced. While it is true that 12 O.S.1991 § 2017, permits partnerships to sue and be sued in their own name, there is nothing in section 2017, or any other statutory provision, that specifically abrogates the right of general partners to bring an action in the name of, and on behalf of, the partnership. In fact, 54 O.S.1991 § 167, indicates just the opposite, stating that a general partner is excepted from the rule that a contributor to a limited partnership is not a proper party to an action "by or against a partnership." Accordingly, Partners are proper parties to this action, and the trial court's decision otherwise was in error.
In its second summary judgment motion, OXY asserted that Plaintiffs' knowledge of certain undisputed facts established--as an undisputed fact--that Plaintiffs knew or should have known their property was permanently damaged by OXY's operations more than two years before this action was filed. Alternatively, OXY asserted the undisputed facts showed Plaintiffs could not establish the existence of (1) damages or legal injury, (2) a nuisance, (3) unjust enrichment, and (4) constructive fraud, as a matter of law.
The trial court did not state its grounds for granting OXY's second summary judgment motion, which went to the merits of Plaintiffs' claim. Because the court's order disposed of the entire action, however, we presume the basis for the decision was one that would have barred Plaintiffs' claim in its entirety, i.e., either the undisputed facts showed the action was barred by the applicable statute of limitations, or they showed the absence of an element of proof that was essential to any theory of recovery as a matter of law.
As noted above, summary judgment is proper only if the record reveals uncontroverted material facts failing to support any legitimate inference in favor of that party. Kissee, 859 P.2d at 505. The Oklahoma Supreme Court has specifically directed that the materials attached to a party's response to a motion for summary judgment are "not to be held to the standard of competent, admissible evidence." Davis v. Leitner, 782 P.2d 924, 926 (Okla.1989). Rather, it is sufficient that the materials "reasonably show the judge who is considering the motion that the party opposing the motion will be able at the time of trial to present competent, admissible evidence" to support the party's allegations. Id. It also is well-settled in Oklahoma that a plaintiff is not required to prove his entire case in order to avoid a motion for summary judgment, but must show only that a controversy exists. Gilmore v. St. Anthony Hospital, 598 P.2d 1200, 1205 (Okla.1979).
In its trial court brief, OXY argued the following facts were undisputed:
1. That decades of industrial tenant operations had polluted the property with oil field wastes and heavy metals.
2. That the presence of a tank battery and pit at the eastern boundary of the property ... had damaged the property [during the 1980s].
3. That the surface release of petroleum products and surface conditions on-site indicated or had caused pollution of the groundwater under the property.
4. That legal action could be taken by the Partnership against the person or entity believed to have caused the pollution and that any such action must be taken within two years of the injury.
OXY asserted that, because Partnership allegedly knew of these facts more than two years before the lawsuit was filed, the facts established as a matter of law that Partnership "knew or reasonably should have known by April 24, 1990, that its groundwater was polluted,"...
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