National Telephone Co-Op. Ass'n v. Exxon Corp., Civ.A. 96-02504 (CKK).

• Decision Date: 19 November 1998
• Docket Number: No. Civ.A. 96-02504 (CKK).,Civ.A. 96-02504 (CKK).
• Parties: NATIONAL TELEPHONE COOPERATIVE ASSOCIATION, Plaintiff, v. EXXON CORPORATION, Defendant.
• Court: U.S. District Court — District of Columbia

Page 1

38 F.Supp.2d 1

NATIONAL TELEPHONE COOPERATIVE ASSOCIATION, Plaintiff, v. EXXON CORPORATION, Defendant.

No. Civ.A. 96-02504 (CKK).

United States District Court, District of Columbia.

November 19, 1998.

COPYRIGHT MATERIAL OMITTED

Donald B. Mitchell, James H. Hulme, Arent, Fox, Kintner, Plotkin & Kahn, Washington, DC, for plaintiff.

Cynthia J. Morris, Heather E. Grange, Washington, DC, for defendant.

MEMORANDUM OPINION

KOLLAR-KOTELLY, District Judge.

In a five-count Complaint sounding in common-law negligence, trespass, nuisance, and strict liability, the Plaintiff National Telephone Cooperative Association ("NTCA") seeks compensatory and punitive damages from Defendant Exxon Corporation ("Exxon") for gasoline contamination that allegedly has migrated from Exxon's underground storage tanks to NTCA's adjacent property. Pending before the Court are Exxon's Motion for Summary Judgment, NTCA's Opposition thereto, and Exxon's Reply. After carefully reviewing the voluminous exhibits, deposition testimony, and controlling law, the Court grants in part and denies in part Exxon's motion. The Court enters judgment in favor of Exxon on Count II (strict liability), Count III (trespass), Count IV (private nuisance), and Count V (public nuisance). Furthermore, the Court enters judgment in favor of Exxon with respect to Count I's claim of negligent maintenance and operation. The Court, however, denies summary judgment with respect to Count I's negligentremediation claim. Moreover, the Court holds that NTCA may pursue its economic-damages claims without proof of physical harm to its property, and finds that there exist genuine issues of material fact that preclude summary judgment on NTCA's prayer for punitive damages.

I. BACKGROUND

Although the parties have thoroughly chronicled all relevant events that span the past few decades, the salient facts necessary to resolve the pending Motion for Summary Judgment may be briefly summarized. Exxon and its predecessors have owned a gasoline service station at 2600 Pennsylvania Avenues, N.W. since the early 1920s. See Answer ¶ 10; Def.'s Motion for Summ.J. ("Def.'s MSJ") at Ex. 3 (Standard Oil Co., Plat of Service Station, May 1927). Since at least 1953, Exxon has warehoused its gasoline and other petroleum products in underground storage tanks ("USTs"). See Pl.'s Opp'n at Ex.3 (1953 permit to install tanks). Then in February 1971, Exxon installed five new steel USTs. See id. at Ex. 2 (building inspector report). Despite adding these new USTs, Exxon elected not to remove the tanks that it had installed in 1953. See id. at Ex. 6 (Dep. of Yeh at 107-09). In the years that have elapsed, Exxon's USTs have periodically suffered leaks that have released gasoline into the Exxon property. See id. at Ex. 7 (Dep. of Campbell at 144-46); Def.'s MSJ at 3-4 (admitting that its USTs leaked in 1985 and 1990).

NTCA's property is located adjacent to the Exxon station.¹ On March 13, 1990, NTCA's building manager, Theil "Butch" Jackson, witnessed, what an Exxon engineer later described as, "a black waste-oil like substance" leaking through the below-grade basement wall of the NTCA building that abuts the Exxon station. See Pl.'s' Opp'n at Ex. 11 (Dep. of Rhodes). When notified of this, Exxon dispatched a company with which it contracts, Handex of Maryland, Inc. ("Handex"), to assess the damage. See Def.'s MSJ at Ex.20 (Dep. of Otwell at 26); id. at Ex. 21 (letter from Handex to NTCA, Apr. 10, 1990). Exxon ultimately decided to repair the NTCA wall at its own cost. Between April 11 and April 16, 1990, Structural Preservation Systems repaired the wall. See Pl.'s Opp'n at Ex. 17 (Dep. of Kraus at Ex.4). On August 15, 1990, Handex employees "removed [the remaining] oil stain from adjacent building." Pl.'s Opp'n at Ex. 20 (Bates HAN 4523).

Approximately five years later, black material again began to leak through the NTCA wall. See Pl.'s Opp'n at Ex. 36 (Dep. of Jackson at 84-87). During this interim period, NTCA's building manager has testified that nothing "caused [him] to question whether or not the problem was repaired." Id. at Ex. 36 (Dep. of Jackson at 88).

Shortly before this incident, NTCA had decided to sell its building and retreat to the Virginia suburbs. See Pl.'s Opp'n at Ex. 18 (Dep. of Fairhead at 13). Despite overtures from several potential buyers, NTCA maintains that the gasoline that allegedly continues to migrate from the Exxon station onto its property has diminished its market value. Recently, however, the NTCA property was placed under contract to be sold for $6.6 million despite the present environmental problems. See Def.'s MSJ at Ex. 28 (purchase agreement, Aug. 13, 1998). This figure exceeds the value at which NTCA's own expert appraised the property in its uncontaminated state. See id. at Ex. 29 (Chaney & Associates' Limited Appraisal, Update Report, Aug. 24, 1998).

II. DISCUSSION

A. The Standard for Evaluating Motions for Summary Judgment.

A party is entitled to summary judgment if the pleadings, depositions, answers to interrogatories, and affidavits demonstrate that there is no genuine issue of material fact in dispute and that the moving party is entitled to judgment as a matter of law. See FED.R.CIV.P. 56(c); Tao v. Freeh, 27 F.3d 635, 638 (D.C.Cir. 1994). Although a court should draw all reasonable inferences from the supporting records submitted by the nonmoving party, the mere existence of a factual dispute, by itself, is not sufficient to bar summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The adverse party's pleadings must evince the existence of a genuine issue of material fact. See id. at 247-48, 106 S.Ct. 2505. To be material the factual assertion must be capable of affecting the substantive outcome of the litigation; to be genuine, the issue must be supported by sufficiently admissible evidence such that a reasonable trier-of-fact could find for the nonmoving party. See id.; Laningham v. United States Navy, 813 F.2d 1236, 1242-43 (D.C.Cir.1987). Mere allegations or denials in the adverse party's pleadings are insufficient to defeat an otherwise proper motion for summary judgment. Rather, the nonmoving party bears the affirmative duty to present, by affidavits or other means, specific facts showing that there is a genuine issue for trial. See id. at 248-49, 106 S.Ct. 2505. The adverse party must do more than simply "show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

B. NTCA's Claims Are Timely Pursuant to the Continuing-Tort Doctrine

Exxon initially moves to dismiss NTCA's Complaint in its entirety based on the District of Columbia's statute of limitations. Although a plaintiff normally must bring suit within three years to recover damages for real-property injuries, see D.C.CODE § 12-301(3), District of Columbia law has enlarged the statute of limitations to five years when toxic substances precipitate the injury, see id. § 12-301(10). Moreover, section 12-310(10) explicitly incorporates elements of the common-law discovery rule. Specifically, it provides that the action must be brought within "5 years from the date the injury is discovered or with reasonable diligence should have been discovered." Id.

Here, NTCA clearly recognized that Exxon's contaminated property had injured its own land in 1990 when its building manager first noticed a stain on the basement wall adjacent to the gasoline station. While not quibbling over this, NTCA argues that the venerable common-law continuing-tort theory insulates its Complaint from Exxon's summary-judgment motion. As this Circuit has conceptualized the doctrine's contours in the District of Columbia: "Under District of Columbia law, a plaintiff establishes a continuing tort by showing `(1) a continuous and repetitious wrong, (2) with damages flowing from the act as a whole rather than from each individual act, and (3) at least one injurious act within the limitation period.'" Whelan v. Abell, 953 F.2d 663, 673 (D.C.Cir.1992) (quoting DeKine v. District of Columbia, 422 A.2d 981, 988 n. 16 (D.C. 1980)). Indeed, in 325-343 East 56th St. Corp. v. Mobil Oil Corp., 906 F.Supp. 669 (D.D.C.1995), a negligence and strict-liability action brought to recover damages for leaking USTs, this Court invoked the continuing-tort theory to find that the plaintiff's claims were not barred by the statute of limitations. See id. at 675. Here, NTCA's claims fall squarely within the ambit of the continuing-tort doctrine. First, NTCA's expert witness has indicated that gasoline that allegedly has saturated Exxon's property continues to migrate onto NTCA's property. See Pl.'s Opp'n at Ex. 7 (Dep. of Campbell at 519-22). Second, damages obviously flow "from the act as a whole rather than from each individual act" because migration of toxic contaminants is a fluid process incapable of hermetic division. Finally, there has been at least one injurious act within the limitation period. Not only does the gasoline continue to migrate across the property line, but NTCA has produced evidence that Exxon did not remove its leaking USTs until November 1991. See Pl.'s Opp'n at Ex. 40 (Dep. of Yeh at Ex. 30).

While cognizant of the continuing-tort doctrine, Exxon maintains that D.C.CODE § 12-301(10) abrogates this well-recognized exception to the statute of limitations. As Exxon has framed the issue: "The question before this Court is one of first impression: whether the continuing tort doctrine is applicable to claims brought under Section 12-301(10)." Def.'s Reply at 8. According to Exxon, by specifically incorporating a portion of the discovery rule and extending the typical limitations period from three to five years, the D.C. legislature sought to vitiate the continuing-tort doctrine of any application to these types of damage actions. Based on...