Robertshaw Controls v. Watts Regulator

• Decision Date: 05 November 1992
• Docket Number: Civ. No. 91-0382-P-C.
• Citation: 807 F. Supp. 144
• Parties: ROBERTSHAW CONTROLS COMPANY, Plaintiff, v. WATTS REGULATOR COMPANY, George B. Horne, Timothy P. Horne, Defendants.
• Court: U.S. District Court — District of Maine

807 F. Supp. 144

ROBERTSHAW CONTROLS COMPANY, Plaintiff, v. WATTS REGULATOR COMPANY, George B. Horne, Timothy P. Horne, Defendants.

Civ. No. 91-0382-P-C.

United States District Court, D. Maine.

November 5, 1992.

David Peters, K. Sisk, Rita Sheffey, Hunton & Williams, Atlanta, GA, Joseph Groff, Jensen, Baird, Gardner & Henry, Portland, ME, for plaintiff.

Don Kennedy, John Daukas, Goodwin, Proctor & Hoar, Boston, MA, William Kayatta, Steven Abbott, Stephen Grygiel, Pierce, Atwood, Scribner, Allen, Smith & Lancaster, Portland, ME, for defendants.

MEMORANDUM OF DECISION AND ORDER

GENE CARTER, Chief Judge.

In this seven count action, Plaintiff seeks monetary damages from Defendant under section 107 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9607, as amended by the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"), federal common law, and Massachusetts state law on strict liability, negligence, restitution, fraudulent misrepresentation, and wanton misconduct.¹ Plaintiff has filed a Motion for Partial Summary Judgment (Docket No. 9) as to the liability of Defendants under Section 107 of CERCLA. Defendants filed a Motion for Summary Judgment (Docket No. 15) on all counts of the Complaint, based upon a contractual release which Defendants argue bars all of Plaintiff's claims.

A motion for summary judgment must be granted if:

The pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Fed.R.Civ.P. 56(c). The Court of Appeals for the First Circuit has recently articulated the legal standard to be applied in deciding motions for summary judgment:

The movant must adumbrate `an absence of evidence to support the nonmoving party's case.' Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). When that is accomplished, the burden shifts to the opponent to establish the existence of a fact issue which is both `material,' in that it might affect the outcome of the litigation, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976), and `genuine,' in that a reasonable jury could, on the basis of the proffered proof, return a verdict for the opponent. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Oliver v. Digital Equipment Corp., 846 F.2d 103, 105 (1st Cir.1988). It is settled that the nonmovant may not rest upon mere allegations, but must adduce specific, provable facts demonstrating that there is a triable issue. `The evidence illustrating the factual controversy cannot be conjectural or problematic; it must have substance in the sense that it limits differing versions of the truth which a factfinder must resolve at an ensuing trial.' Mack v. Great Atlantic and Pacific Tea Co., 871 F.2d 179, 181 (1st Cir.1989). As the Supreme Court has said:

There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

Anderson, 477 U.S. at 249-59, 106 S.Ct. at 2510-15.

Brennan v. Hendrigan, 888 F.2d 189, 191 (1st Cir.1989).

FACTS

The Court finds the following undisputed facts. Plaintiff Robertshaw Controls Company ("Robertshaw") is a Delaware corporation with its principal place of business in Richmond, Virginia. Defendant Watts Regulator Company ("Watts Regulator") is a Massachusetts corporation with its principal place of business in North Andover, Massachusetts.² Individual Defendants George B. and Timothy P. Horne ("Individual Defendants") are citizens and residents of Massachusetts.

Today, Robertshaw owns a site ("the Site") located in Kittery, Maine where it conducts manufacturing operations.³ From approximately 1967 until March 15, 1978, Defendant Watts Regulator owned the Site and conducted numerous manufacturing operations, from machining through final assembly and packaging, related to the production of compressed air regulators, filters, lubricators, and regulators at the Site. Many of these manufacturing operations involved the use of hazardous substances.

George and Timothy Horne were shareholders of Watts Regulator during the time that it owned and conducted business at the Site. From approximately 1967 through the period prior to and including the time of the sale of the Site in 1978, George Horne was an officer of Watts Regulator. He served as President from 1967 until September 1976. From September 1976 through the period prior to and at the time of the sale of the Site, George Horne was Chairman and Chief Executive Officer of Watts Regulator.

In his capacity as Chairman and Chief Executive Officer, George Horne had the authority to control the use and disposal of waste and hazardous materials at the Facility; he managed Watts Regulator's growth and new product development, including the areas of sales, marketing and manufacturing; and he provided the necessary ultimate approval of purchase orders for capital expenditures for the Facility, inducing capital expenditures for the initial machines and equipment as well as those related to recommendations for improvements in processes or equipment used at the facility. Over the years, George Horne visited the Site when it was being prepared for construction, to review the progress of any construction, to meet with employees, and to tour the manufacturing operations with guests. Because he had responsibilities for the corporate affairs of Watts Regulator, George Horne was also involved in negotiating the sale of the Site to Robertshaw.

Similarly, Timothy Horne was also an officer of Watts Regulator from 1967 to through the time of the sale of the Site in 1978. Timothy Horne had the authority the control the use and disposal of waste and hazardous materials at the Facility; he provided approval of capital and noncapital expenditures for the Facility, including expansion of the Facility; he had responsibility concerning the use of machinery; he initiated and participated in the decision-making process with respect to the selection, replacement and rearrangement of equipment at the Facility; and he made organizational and personnel decisions with respect to Watts Regulator's employees working at the Facility.

Pursuant to an agreement dated December 23, 1977, a British firm known as CompAir Limited and its wholly owned subsidiary, Robertshaw, purchased the Watts Regulator assets, including the Site, from Watts Regulator. At the time of the sale of the Site, George and Timothy Horne were shareholders of Watts Regulator. As part of the sale of the Site, George and Timothy Horne were holders of title to the Site for one day, until the title passed to CompAir Limited and Robertshaw.⁴

After purchasing the Site, Robertshaw eliminated the process discharges involved in the machinery operations and sealed all drains allowing untreated waste to be discharged into the soil in 1979 and 1980.⁵ Business disputes later arose between Watts Regulator, Robertshaw, Robertshaw's corporate parent, CompAir Inc., and CompAir Limited.⁶ On February 11, 1982, the parties executed a Settlement Agreement and a Release to resolve these disputes.⁷

In October 1987, Robertshaw was required by the Maine Department of Environmental Protection ("DEP") to submit a preliminary site assessment report for the area. The preliminary report submitted to the DEP in December 1988, stated that the soils, sediments and groundwater at the Site were contaminated with hazardous substances.⁸ In December 1989, Robertshaw submitted a Site Assessment Report to the DEP, documenting the extent to which the soils, sediments, and groundwater at the Site were contaminated with hazardous substances.

In March 1990, the DEP issued, and Robertshaw agreed to comply with, an Administrative Consent Agreement and Enforcement Order. The requirements of the Order include the submission of a plan providing for removal or treatment of all hazardous substances at the Site. To date, Robertshaw, under the terms of the Order, has paid more than $1.3 million for investigation, testing, monitoring, sampling, analysis, evaluation, oversight, and internal remediation on the Site. In addition, Robertshaw has expended over $160,000 in attorneys' fees in response to the release or threatened release of numerous hazardous substances at the Site. The remediation continues and Plaintiff's estimated total cost, subject to modification, is $3.7 million.

I. LIABILITY UNDER CERCLA

The Court has carefully examined the record of this case and has found genuine issues of material fact to be in dispute regarding whether each of the various chemicals found in the soil was released during Defendants' ownership of the Site. Of the nine chemicals found in the soil by the DEP and for which Plaintiffs seek removal costs, the parties only agree about the release of one chemical during Defendants' ownership of the Site.⁹ Whether or not the other eight chemicals were released onto the Site during Defendants' tenure, and if so, in what proportion, is relevant to the proper apportionment of removal costs among the parties. Thus, a genuine issue of material fact remains in dispute making a full determination of CERCLA liability a question for the factfinder.

However, in spite of these genuine issues of material fact, the Court must determine whether the Individual Defendants are proper defendants in this case, as corporate officers held personally liable under CERCLA. CERCLA was enacted in response to the increasing concern about the vast problems of the disposal of and contamination from hazardous waste throughout the country. It is...