Ninth Ave. Remedial Group v. Allis-Chalmers Corp., 2:94-CV-331-RL.

CourtUnited States District Courts. 7th Circuit. United States District Court of Northern District of Indiana
Citation195 BR 716
Docket NumberNo. 2:94-CV-331-RL.,2:94-CV-331-RL.
PartiesThe NINTH AVENUE REMEDIAL GROUP, et al., Plaintiffs, v. ALLIS-CHALMERS CORPORATION, et al., Defendants.
Decision Date19 April 1996

195 B.R. 716 (1996)

The NINTH AVENUE REMEDIAL GROUP, et al., Plaintiffs,

No. 2:94-CV-331-RL.

United States District Court, N.D. Indiana, Hammond Division.

April 19, 1996.

195 BR 717
195 BR 718
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Harold Abrahamson, Abrahamson Reed and Adley, Hammond, IN, Joseph V. Karaganis, A. Bruce White, Mark D. Erzen, John W. Kalich, Karaganis and Wyhite, H. Alfred Ryan, Chicago, IL, for plaintiffs

Ronald G. Hayden, Russell R. Eggert, Mayer Brown and Platt, Chicago, IL, Robyn Ice Sosebee, Nill V. Toulme, R. Wayne Thorpe, Alston & Bird, Atlanta, GA, Jane B. Amdahl, Joseph S. Van Bokkelen, Goodman, Ball and VanBokkelen, Highland, IN, for defendants.


LOZANO, District Judge.

This matter is before the Court on Defendant Clark Refining & Marketing Inc.'s Motion to Dismiss or, Alternatively, for Summary Judgment, filed February 6, 1995; Defendant Clark Refining & Marketing, Inc.'s Motion to Dismiss or, Alternatively, for Summary Judgment Against Crossclaim of Defendant Barber-Greene Company, filed June 14, 1995; and Defendant Clark Refining & Marketing, Inc.'s Motion to Dismiss or, Alternatively, for Summary Judgment Against Crossclaim of Defendant Commander Packaging Corporation, filed August 1, 1995. Plaintiffs, the Ninth Avenue Remedial Group and its members (collectively "Ninth Avenue Group"), and Defendant/Cross-Plaintiff Barber-Greene Company

195 BR 720
filed responses to the motions. For the reasons set forth below, the motions are DENIED


This case concerns the Ninth Avenue Dump Superfund site in Gary, Indiana. The site, which operated as a chemical and industrial waste disposal facility during the 1970's, has been contaminated by releases or threatened releases of the hazardous substances dumped there. Plaintiff, Ninth Avenue Remedial Group, has conducted and is conducting cleanup activities at the Ninth Avenue site under the approval of the Environmental Protection Agency ("EPA").

The Ninth Avenue Remedial Group is an unincorporated voluntary association of corporations which its members created to take collective actions relating to the site. All of its members, who are also Plaintiffs in this action, have been named in orders issued by the EPA instructing them to undertake the cleanup of the site. The Group and its members now sue several Defendants under the Comprehensive Environmental Response Compensation and Liability Act of 1980 as amended ("CERCLA"), 42 U.S.C. §§ 9607 and 9613, for contributions to the cleanup costs which amount to over $20 million.

In their complaint, Plaintiffs allege that Defendants, including Clark Refining & Marketing, Inc. ("Clark"), are "covered persons" as defined by CERCLA, 42 U.S.C. § 9607(a)(3), and that EPA has identified many of the Defendants as potentially responsible parties ("PRP's") within the meaning of the Act in one or more of its orders relating to the site. Specifically, Plaintiffs allege that each Defendant "by contract, agreement or otherwise, arranged (or is the successor in interest of an entity that arranged) for the disposal or treatment at the Site, or arranged with a transporter for the disposal or treatment at the Site of hazardous substances." Compl. ¶ 8. See CERCLA, 42 U.S.C. § 9607(a)(3). The Ninth Avenue Group claims that Defendants are strictly, jointly and severally liable for all past and future response costs associated with the site.

According to Clark, Apex Oil Company ("Apex") purchased Clark Oil & Refining Corporation ("Old Clark") in 1981. In December of 1987, Apex and its subsidiaries, including Old Clark, sought protection from creditors under Chapter 11 of the Bankruptcy Code. After a period of negotiations, the Horsham Corporation, through its subsidiary, AOC Acquisition Corporation, agreed to purchase certain assets of Apex and its subsidiaries, including many of Old Clark's facilities. AOC Acquisition later changed its name to Clark Refining & Marketing, Inc., now a Defendant in this action.

The asset purchase agreement between Apex and AOC/Clark provided that Clark would not assume any liability for claims arising from the operation of Old Clark's facilities prior to the sale. In particular, the agreement excluded assumption of liability for environmental claims:

AOC/Clark shall assume no liabilities, claims, commitments or obligations of any Seller, disclosed or undisclosed, except as expressly assumed by the purchaser pursuant to the purchase agreement. Apex and its subsidiaries shall remain liable, except as may be disallowed or discharged in the Bankruptcy Case or otherwise affected by any plan or plans of reorganization confirmed in the Bankruptcy Case, for each and every obligation or liability of such Seller, whether or not related to the Purchased Assets or Seller\'s Business Sold other than the assumed liabilities . . . including . . . (ii) any liability (other than Assumed Liabilities) for any and all claims, demands, causes of actions, proceedings, and/or suits, damages, losses (of any kind, including actual, compensatory and punitive), including the cost of correcting or compensation for injuries of any kind, including those to persons, property, the environment, or natural resources, and for fines, interest, penalties, losses, and other costs of any kind, including court costs, engineering costs, and attorneys fees, under any Applicable Law ("Environmental Claims"), relating to protection of health, safety or the environment or imposing liability or standards of conduct concerning any hazardous or nonhazardous material, waste or substance (including any Environmental Law) which
195 BR 721
are commenced against or are incurred by Purchaser and arise out of or relate to ownership, business, occupation, use, maintenance or operation of the Purchased Assets of Seller\'s Business Sold prior to the Closing Date by any Seller or any Subsidiary or Affiliate of any Seller.

(Defendant's Exhibit 3 — Asset Purchase Agreement § 2.3)

In November 1988 the bankruptcy court approved the agreement for the sale of assets to AOC/Clark "free and clear of all liens, claims, taxes, encumbrances, obligations, contractual commitments, and interests," pursuant to 7 U.S.C. § 363(f). In re Apex Oil Co., 92 B.R. 847 (Bankr.E.D.Mo.1988) (order approving sale of assets to AOC/Clark). In addition, the order provided that "the rights of creditors and other parties in interest asserting a lien or other interest against the Purchased Assets shall attach to the Purchase Price; . . . liens and interests against the Purchased Assets shall be of no further force and effect." Id. Two years later, in August 1990, the bankruptcy court entered an order confirming the Chapter 11 reorganization plan for Apex and its subsidiaries. The order discharged the debtors of any claims arising prior to the confirmation order. In re Apex Oil Co., 118 B.R. 683, 713 (Bankr.E.D.Mo.1990).


Standard of Review

When deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) the court must assume the truth of plaintiff's well-pleaded allegations and make all possible inferences in plaintiff's favor. Albright v. Oliver, 510 U.S. 266, ___, 114 S.Ct. 807, 810, 127 L.Ed.2d 114 (1994); Prince v. Rescorp Realty, 940 F.2d 1104, 1106 (7th Cir.1991); Janowsky v. U.S., 913 F.2d 393, 395 (7th Cir.1990). The court should not dismiss the complaint "unless 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, 102, 2 L.Ed.2d 80 (1957); Prince, 940 F.2d at 1106.

If the court considers matters outside the pleadings when deciding a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss, the court should treat the motion as one for summary judgment. Fed.R.Civ.P. 12(b). As Clark explains in its reply, however, the Court could consider some of the documents introduced by Clark with the motion without converting the motion to dismiss into a motion for summary judgment. Courts can take judicial notice of matters of public record without converting a motion to dismiss into a motion for summary judgment. Henson v. C.S.C. Credit Services, 29 F.3d 280, 284 (7th Cir.1994). In United States v. Wood, 925 F.2d 1580, 1582 (7th Cir.1991), for example, the court considered the case file of prior bankruptcy proceedings involving one of the parties. The language of the cases cited above and others cited by Defendant do not mandate the courts to consider matters of public records when deciding motions to dismiss; the cases simply state that the courts may consider the documents if appropriate.

Most of the documents submitted by Clark are orders from the Bankruptcy Court of the Eastern District of Missouri where Apex and Old Clark filed for bankruptcy. Clearly, this Court could consider the previous orders of another federal court when deciding a motion to dismiss. Clark also included several self-authenticated certificates of incorporation which are official public records. However, Clark includes other documents, such as an affidavit and an asset purchase agreement, which the Court will consider only under summary judgment. Because not all the documents submitted by Defendant qualify for judicial notice, the Court only will look at the pleadings when deciding the motion to dismiss. The Court will apply the summary judgment standard when considering the documents submitted by Defendant.

When deciding a motion to dismiss under summary judgment standards, granting summary judgment is proper only if the movant demonstrates that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. See Nebraska v. Wyoming and Colorado, 507 U.S. 584, 113 S.Ct. 1689, 1694, 123 L.Ed.2d 317 (1993); Celotex Corp. v. Catrett, 477 U.S.

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317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986)....

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