Peniel Grp., Inc. v. Bannon

• Decision Date: 30 July 2012
• Docket Number: No. 49A02–1201–PL–42.,49A02–1201–PL–42.
• Citation: 973 N.E.2d 575
• Parties: The PENIEL GROUP, INC. and Beech Grove Holdings, LLC, Appellants, v. Elizabeth BANNON, Kenneth G. Schaefer, Linda A. Schaefer, Norma Thinnes, Betty Benefiel, Janet Beeler, Charles Dodson and Beth Dodson, Appellees.
• Court: Indiana Appellate Court

973 N.E.2d 575

The PENIEL GROUP, INC. and Beech Grove Holdings, LLC, Appellants,

v.Elizabeth BANNON, Kenneth G. Schaefer, Linda A. Schaefer, Norma Thinnes, Betty Benefiel, Janet Beeler, Charles Dodson and Beth Dodson, Appellees.

No. 49A02–1201–PL–42.

Court of Appeals of Indiana.

July 30, 2012.

Donn H. Wray, Nicholas K. Ghal, Stewart & Irwin, P.C., Indianapolis, IN, Attorneys for Appellants.

Daniel P. McInerny, Bryan H. Babb, Alex C. Intermill, Bose McKinney & Evans LLP, Indianapolis, IN, Attorneys for Appellee Betty Benefiel.

Katherine L. Shelby, Margaret M. Christensen, Bingham Greenebaum Doll LLP, Indianapolis, IN, Attorneys for Appellees Charles Dodson and Beth Dodson.

OPINION

DARDEN, Senior Judge.

STATEMENT OF THE CASE

The Peniel Group, Inc. (“Peniel”) and Beech Grove Holdings, Inc. (collectively, “Beech Grove Holdings”) appeal the trial court's entry of summary judgment in favor of Betty Benefiel, Kenneth G. and Linda A. Schaefer, Janet Beeler, and Charles and Beth Dodson (collectively, the “Appellees”).

We affirm.

ISSUE

Whether the trial court properly granted the Appellees' cross-motions for summary judgment.

FACTS

Churchman Hill Plaza (the “Site”) is a commercial retail center located in Beech Grove, Indiana. From approximately 1969 until 1996, a dry cleaning business, owned and operated by various individuals over that period of time, was one of the tenants at the Site. In 1981, Churchman Hill Associates obtained title to the Site.

In 1989, the Dodsons formed a partnership with two others called the Four Corners Group. On June 30, 1989, the partnership purchased the business assets of Speed Queen Fabric Care, the dry cleaning business that operated at the Site, from David and Janet Beeler. The assets purchased from the Beelers included four coin-operated self-service dry cleaning machines, which used the chemical tetrachloroethene (“PCE”), a dry cleaning solvent. The PCE was stored in an above-ground storage tank at the Site.

On two occasions, either Charles Dodson or an employee spilled “a small” quantity of PCE as they were refilling the machines.(App. 118). ¹ Concrete basins underneath the machines contained the spills. Occasionally “[s]mall amounts” of PCE leaked from the machines into the concrete basins when the rubber seals on the doors failed. (App. 121). Employees placed used PCE filters in containers before discarding them in a dumpster located at the Site. The partnership ceased using the dry-cleaning machines in 1996 or 1997.

On or about March 7, 1997, ATC Associates, Inc. (“ATC”) conducted an environmental site assessment at the Site. Field samples obtained by ATC in the immediate vicinity of the dry cleaning business revealed the presence of the chemicals PCE and trichloroethene (“TCE”) in the groundwater and PCE in the soil. ATC opined that “the source of contaminants is the on-site dry cleaner” and “likely related to the dry cleaning process.” (App. 193).

ATC conducted a second assessment of the Site in 2000 and again found levels of PCE and TCE in the soil and groundwater. ATC presented its site assessment to Churchman Hill Plaza Associates, the Site's then-owner, on January 27, 2000. In 2001, LNR Churchman Hill Plaza, LLC, by LNR Partners, Inc., formerly known as Lennar Partners, Inc., purchased the Site.

In June of 2005, Bryan Phillips, as President of Lassiter Development Corporation (“Lassiter”) entered into an agreement to purchase the Site from LNR Churchman Hill Plaza, LLC. As part of the sale, Lassiter received copies of the prior environmental assessments conducted at the Site. In September of 2005, Lassiter assigned the agreement for sale to Beech Grove Holdings, Inc., of which Phillips is a member. Peniel, which Phillips had started in 1999 as a real estate development and property management company, managed the Site on behalf of Beech Grove Holdings, Inc.

In 2005, Peniel retained American Environmental Corporation (“AEC”) to conduct a third assessment of the Site. The assessment revealed levels of PCE and TCE above default closure levels ² established by the Indiana Department of Environmental Management (“IDEM”) under its Risk Integrated System of Closure (“RISC”), which is a “guidance manual that describes how to achieve consistent closure of contaminated soil and groundwater using existing IDEM programs.” http:// www. in. gov/ idem/ 4198. htm (last visited June 26, 2012).

In November of 2005, AEC informed IDEM that there had been “[a] release of hazardous substances” at the Site. (App. 462). On or about September 15, 2006, IDEM sent a certified letter to Phillips, “requesting” that Peniel, as “a potentially responsible person,” “perform an investigation to characterize the nature and extent of the contamination,” as provided by IDEM's RISC and pursuant to Indiana Code section 13–25–4–5. (App. 462).

Subsequently, AEC performed further site investigations at the behest of Peniel and provided its findings to IDEM. The findings again revealed levels of PCE above default closure levels. IDEM, however, did not compel remedial action, and Beech Grove Holdings took no such action.

On November 21, 2008, Beech Grove Holdings filed a complaint against the Appellees ³ pursuant to Indiana Code section 13–30–9–2, which provides:

A person may, regardless of whether the person caused or contributed to the release of a hazardous substance ... into the surface or subsurface soil or groundwater that poses a risk to human health and the environment, bring an environmental legal action against a person that caused or contributed to the release to recover reasonable costs of a removal or remedial action involving the hazardous substances....

Beech Grove Holdings asserted that the Appellees, “[t]hrough their actions and/or inactions with respect to the chlorinated solvents located on the Site ... caused and/or contributed to the release of a hazardous substance ...” at the Site. (App. 36). Accordingly, pursuant to Indiana Code section 13–30–9–3, which provides for the allocation of the “costs of the removal or remedial action in proportion to the acts or omissions of each party” in an environmental legal action, Beech Grove Holdings sought a judgment against the Appellees for all costs related to the PCE and TCE contamination of the Site, including, but not limited to, “investigation, assessment, remediation, corrective action, [and] consulting” costs. (App. 37).

The Dodsons filed their answer on February 20, 2009, wherein they denied liability and raised as an affirmative defense that Beech Grove Holdings's claims are barred by the applicable statute of limitations. The Dodsons also filed a cross-claim against their co-defendants.

Benefiel filed her answer on December 4, 2009. Benefiel denied ever operating a dry cleaning business at the Site and therefore asserted that she was not a proper party to either the Dodsons' or Beech Grove Holdings's actions. Benefiel, however, admitted that dry cleaning chemicals were used at the Site. She also raised as an affirmative defense that any claims were barred by the statute of limitations.

On August 11, 2010, Beech Grove Holdings filed a motion for partial summary judgment as to liability only. The Dodsons filed a cross-motion for summary judgment, asserting that the six-year statute of limitations provided by Indiana Code section 34–11–2–7 barred the complaint. The Dodsons argued that the statute of limitations began to run on February 28, 1998, when the Environmental Legal Action (“ELA”) statutes found under Article 30 of Title 13 of the Indiana Code became effective. The Dodsons asserted that the claim accrued on that date because Beech Grove Holdings, or its predecessors, discovered, or could have discovered, that the Site had been contaminated prior to the effective date of the ELA. The Dodsons further argued that Beech Grove Holdings failed to designate evidence that the Dodsons “caused or contributed to the release of a hazardous substance into the surface or subsurface soil or groundwater as required by the ELA.” (App. 165).

On April 6, 2011, Benefiel filed a response in opposition to Beech Grove Holdings's motion for partial summary judgment. She argued that Beech Grove Holdings failed to designate evidence creating a genuine issue of material fact as to Benefiel's liability. Specifically, Benefiel asserted that “a dispute remains regarding the material fact of whether [she] operated a dry cleaning facility at the Site....” (App. 467). She therefore argued that Beech Grove Holdings had failed to show that she caused or contributed to the release of a hazardous substance.

Subsequently, Benefiel and the Schaefers filed motions to join the Dodsons' cross-motion for summary judgment, which the trial court granted. Thereafter, on June 1, 2011, Beech Grove Holdings filed its response in opposition to the cross-motion for summary judgment. Beech Grove Holdings argued that the ten-year statute of limitations applied to its claim; the accrual date is not the date that the ELA was enacted; and the prior owners' knowledge of hazardous substance contamination, if any, at the Site cannot be imputed to Beech Grove Holdings. As to the Dodsons' liability, Beech Grove Holdings designated evidence in the form of the affidavit of expert witness Audrey Kortz, AEC's vice president, who had never visited the Site but opined that the spills of PCE during the Dodsons' operation of the dry-cleaning business “more likely than not reached the subsurface soil and groundwater at the Site.” (App. 499).

The Dodsons filed their reply brief in support of their cross-motion for summary judgment on August 4, 2011. Therein, they argued the claim was barred by either a six-year or ten-year statute of limitations because Beech Grove Holdings's “predecessors in interest knew about the contamination since 1997....” (App. 521). Furthermore, they designated deposition testimony of Kortz and the affidavit of expert witness Andrew Gremos, an environmental consultant...