Pitsch v. ESE Michigan, Inc.
| Decision Date | 02 February 1999 |
| Docket Number | Docket Nos. 203021-203023 |
| Citation | 593 N.W.2d 565,233 Mich.App. 578 |
| Parties | Gary PITSCH, Plaintiff-Appellant, v. ESE MICHIGAN, INC., Defendant-Appellee, and J & S Group, Inc., John Springberg and Pat Johnson, Defendants/Third-Party Plaintiffs, and Dunbar Excavating Company, Inc., Defendant, and R.W. Meyer, Inc., Meyer Construction Company, Robert W. Meyer, Jr., Leo Dunbar and David J. Dunbar, Third-Party Defendants, and John R. Meyer, Thomas B. Meyer and Jane T. Meyer, Third-Party Defendants/Fourth-Party Plaintiffs, and Three-M, a Michigan partnership, Fourth-Party Plaintiff, and Beatrice Foods Company and Conagra, Inc., Fourth-Party Defendants. Gary Pitsch, Plaintiff-Appellant, v. J & S Group, Inc. and John Springberg, Defendant/Third-Party Plaintiffs-Appellees. and Dunbar Excavating Company, Inc. and ESE Michigan, Inc., Defendants, and Pat Johnson, Defendant/Third-Party Plaintiff, and R.W. Meyer, Inc., Meyer Construction Company, Robert W. Meyer, Jr., Leo Dunbar and David J. Dunbar, Third-Party Defendants, and John R. Meyer, Thomas B. Meyer and Jane T. Meyer, Third-Party Defendants/Fourth-Party Plaintiffs, and Three-M, a Michigan partnership, Fourth-Party Plaintiff, and Beatrice Foods Company and Conagra, Inc., Fourth-Party Defendants. Gary Pitsch, Plaintiff-Appellant, v. Dunbar Excavating Company, Inc., Defendant-Appellee, and ESE Michigan, Inc., Defendant, and J & S Group, Inc., John Springberg and Pat Johnson, Defendants/Third-Party Plaintiffs, and R.W. Meyer, Inc., Meyer Construction Company, Robert W. Meyer, Jr., Leo Dunbar and David J. Dunbar, Third-Party Defendants, and John R. Meyer, Thomas B. Meyer and Jane T. Meyer, Third-Party Defendants/Fourth-Party Plaintiffs, and Three-M, a Michigan partnership, Fourth-Party Plaintiff, and Beatrice Foods Company and Conagra, Inc., Fourth-Party Defendants. |
| Court | Court of Appeal of Michigan — District of US |
McShane & Bowie, P.L.C. (by Terry J. Mroz ), Grand Rapids, for Gary Pitsch.
Howard & Howard Attorneys (by James H. Geary ), Kalamazoo, for ESE Michigan, Inc.
Dingeman, Dancer & Christopherson, P.L.C. (by James A. Christopherson ), Traverse City, for J & S Group, Inc.
Haskell Shelton, Midland, for Dunbar Excavating Company, Inc.
Before: CORRIGAN, C.J., and DOCTOROFF and FITZGERALD, JJ.
In these consolidated appeals, plaintiff Gary Pitsch appeals by right orders granting summary disposition for defendants ESE Michigan, Inc., J & S Group, Inc., 1 and Dunbar Excavating Company, Inc., on his claims for the recovery of the cost of remedying environmental contamination on his property. This case squarely presents the issue whether a private cause of action for the recovery of response activity costs exists under the Michigan Environmental Response Act (MERA), M.C.L. § 299.601 et seq.; MSA 13.32(1) et seq. 2 We hold that a private cause of action exists and accordingly reverse the grant of summary disposition for defendants J & S Group and Dunbar regarding plaintiff's MERA claims. We affirm, however, the grant of summary disposition for defendants ESE and Dunbar on plaintiff's claims of negligence and misrepresentation.
This case arises from plaintiff's purchase of real property in Cadillac from defendant J & S Group for $80,000. The agreement was contingent on the completion of an "acceptable" environmental assessment. A week after signing the purchase agreement in May 1991, plaintiff retained defendant ESE to perform a Phase I environmental assessment of the property to identify potential environmental hazards. ESE identified four potential hazards in a report dated June 6, 1991:(1) the possibility of a large-capacity underground storage tank that once held fuel oil; (2) the existence of insulation that possibly contained asbestos; (3) the presence of oil stains near the building; and (4) the existence of a two-inch pipe possibly associated with an underground storage tank. ESE recommended that plaintiff retain it to perform a Phase II investigation during which it would analyze soil and groundwater samples to determine the presence of environmental contamination.
After receiving the Phase I report, plaintiff attempted to initiate a Phase II investigation, but J & S Group would not allow him access to the property. Plaintiff subsequently requested that the parties close on the agreement to sell the property. J & S Group declined to close, claiming that plaintiff breached the contract by not closing on the agreement within thirty days of receiving the Phase I investigation report. In response, plaintiff commenced an action in August 1991 to force the sale.
In late summer 1991, the city of Cadillac initiated condemnation proceedings against the property in an effort to facilitate its development and retained defendant ESE to complete a Phase II investigation. As part of the investigation, ESE dug a trench at the location of the suspected underground storage tank. ESE did not find a storage tank, but discovered stained soil that smelled of fuel oil, indicating that a tank had been removed. ESE then installed monitoring wells to capture groundwater for testing. The initial tests revealed no contamination. ESE notified the city of its preliminary findings in an October 14, 1991, report:
A soil sample collected from the former UST location contained detectable levels of semivolatile polynuclear aromatics (PNAs) including fluoranthene (360 ug/kg) and pyrene (480 ug/kg), and the volatile organic compound xylene (19 ug/kg). No semivolatile compounds including PNAs and volatile compounds including benzene, toluene, ethylbenzene and xylenes (BTEX) were detected in the groundwater. Detection limits for PNAs is 5 ug/l and 1 ug/l for BTEX compounds in water. Semivolatile PNAs and volatile BTEX compounds are commonly found in petroleum products including fuel oil.
The concentrations of the PNA and BTEX compounds which were found in site soils exceed their respective Type A cleanup criteria for these compounds, set forth in the guidance documents developed by the Michigan Department of Natural Resources (MDNR), in accordance with the Environmental Contamination Response Activity Administrative Rules for 1982, P.A. 307, as amended. Type A standards are based on recommended analytical detection limits for laboratory instruments, which for the PNA compounds is 330 ug/kg and 10 ug/kg for xylenes in soils. However, the detectable quantities of PNA and BTEX compounds do not exceed the MDNR Type B cleanup criteria which are based on concentrations which when inhaled, ingested or through skin exposure may impact human health. The MDNR may enforce either cleanup criteria depending upon the degree of risk the contamination may pose to human health or the environment.
ESE concluded as follows:
Based on the limited sampling performed by ESE, and the subsequent detection of PNAs in the Kraft property soils, it is our opinion that the City of Cadillac may be at substantial risk of accepting liability for site cleanup, if it condemns the subject property for public use.
ESE recommended that the city not condemn the property without additional testing to determine the extent of the contamination and the cost of remedying it.
The city subsequently contracted with ESE for further groundwater testing. In early 1992, ESE installed two additional monitoring wells on the property. Testing of samples collected from the wells revealed no contaminants associated with fuel oil. ESE then notified the city in an April 16, 1992, letter that, although the soil at the site of the former storage tank was contaminated, the groundwater was not. ESE reported the following findings and recommendations:
Based on the available data set, it is our position that soils have been impacted by a release at the former UST location. However, based on the available data the release has not impacted the quality of the groundwater at the former UST site at MW-1, or downgradient from the release location at MW-5. Furthermore, BTEX and PNA levels detected in the soil sample collected from the release location do not exceed Michigan Department of Natural Resources (MDNR) Type B cleanup standards. Type B concentration levels for soils are based on human health risk standards and adverse aesthetic impact on the underlying groundwater.
Although the Type B cleanup standards have not been exceeded in this case, ESE recommends that the discolored soils be removed and disposed of at Wexford County Landfill by the current property owners. This would further limit the Cadillac Downtown Development Authorities [sic] liability in the event that cleanup regulations become more stringent or change in the future. However, the landfill will require that the MDNR be notified of the owner's intent to dispose of soils which, in turn, will bring the site under close scrutiny by the MDNR.
On June 17, 1992, the trial court ordered that J & S Group comply with the terms of the sales agreement. Plaintiff and J & S Group thereafter entered into a settlement agreement under which J & S Group agreed to convey the property and plaintiff agreed to hold it harmless and indemnify it against any claims arising from the contamination to the extent that the hazard was disclosed in the ESE reports and other documents. J & S Group conveyed the property to plaintiff on July 31, 1992. Plaintiff subsequently demolished the building located on the property and began response activity to remedy the contamination. In March 1993, he allegedly learned that defendant Dunbar had removed one or more underground storage tanks from the property between 1987 and 1991, releasing hazardous substances into the soil.
Plaintiff commenced this action in September 1994, asserting claims against J & S Group and Dunbar for the recovery of response activity costs under the MERA. Plaintiff also asserted a negligence...
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