Sherwin-Williams Co. v. Artra Group, Inc.

• Decision Date: 12 January 2001
• Docket Number: No. CIV. A. S91-2744.,CIV. A. S91-2744.
• Citation: 125 F.Supp.2d 739
• Parties: THE SHERWIN-WILLIAMS COMPANY, Plaintiff, v. ARTRA GROUP, INC., et al. Defendants
• Court: U.S. District Court — District of Maryland

125 F.Supp.2d 739

THE SHERWIN-WILLIAMS COMPANY, Plaintiff, v. ARTRA GROUP, INC., et al. Defendants

No. CIV. A. S91-2744.

United States District Court, D. Maryland.

January 12, 2001.

COPYRIGHT MATERIAL OMITTED

Randall M. Lutz, Hodes, Ulman, et al, Towson, MD, Allen J. Danzig, Law Office, Cleveland, OH, Christopher W. Poverman, Hodes, Ulman, Pessin & Katz, Towson, MD, Natalie Paige Drinkard, Hodes, Ulman, Pessin & Katz, PA, Towson, MD, for Plaintiff.

Kathleen Howard Meredith, Ilif & Meredith, P.C., Robert E. Scott, Jr., Semmes, Bowen & Semmes, Robert Brooke Hopkins, George Whitthorne Kelly, Ober, Kaler, Grimes & Shriver, Baltimore, MD, Jason

C. Buckel, McGuire, Woods, Battle & Boothe LLP, Richmond, VA, Richard J. Magid, Whiteford, Taylor & Preston, Baltimore, MD, Frank J. Mastro, Law Office, Baltimore, MD, for Defendants.

MEMORANDUM OPINION

SMALKIN, District Judge.

The plaintiff, Sherwin-Williams Company ("SW"), filed a complaint against defendants, ARTRA Group, Inc. ("ARTRA"), et al., asserting claims against ARTRA and other former owners and operators of a contaminated property in an industrial area south of Baltimore, Maryland. Specifically, the plaintiff alleges that the defendants' activities on the property caused the release of hazardous and toxic chemicals that contaminated the soils and groundwater at the property. In its eight-count Complaint, the plaintiff seeks cost recovery, contribution, and declaratory relief pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. Sections 9607(a), 9613(f), and 9613(g)(2) (Counts I-III). In addition, SW asserts claims for common law indemnification, common law contribution, contract indemnification, negligence, and nuisance. This case was stayed for a number of years, on the parties' request, pending certain administrative proceedings, which have now been concluded.

The case is before the Court on numerous motions from the plaintiff, SW, and the defendant, ARTRA. SW filed a motion for partial summary judgment on Counts I-III (the CERCLA claims), and Count VI (for contract indemnification). ARTRA filed five motions with the Court. These included: (1) a motion for judgment on the pleadings with respect to Counts I (CERCLA cost recovery), IV-V (common law indemnification and common law contribution), and counts VII-VIII (negligence and nuisance); (2) a motion for partial summary judgment as to Count VI (contractual indemnification); (3) a motion for partial summary judgment on Counts I-III, alleging that those claims are time-barred; (4) a motion for partial summary judgment as to drum removal costs and costs associated with the so-called 200, 600, and 700 Areas; and (5) a motion for summary judgment regarding SW's alleged failure to comply with the National Contingency Plan. The Court has considered the pleadings submitted by the parties, and no oral hearing is necessary. Local Rule 105.6 (D.Md.).

For clarity, the Court will rule with respect to each Count of the initial Complaint. As to Count I (CERCLA cost recovery), SW's motion for partial summary judgment is DENIED, and ARTRA's motion for judgment on the pleadings is GRANTED.¹ As to Count II (CERCLA contribution), SW's motion for partial summary judgment is GRANTED, and ARTRA's motion for partial summary judgment is DENIED. As to Count III (declaratory judgment), SW's motion for partial summary judgment is GRANTED, and ARTRA's motion for partial summary judgment is DENIED. As to Count IV (common law indemnification), ARTRA's motion for judgment on the pleadings is GRANTED. As to Count V (common law contribution), ARTRA's motion for judgment on the pleadings is GRANTED. As to Count VI (contract indemnification), SW's motion for partial summary judgment is GRANTED with respect to those costs incurred within the limitations period, and ARTRA's motion for partial summary judgment is DENIED, except that it is GRANTED to the extent that claims falling outside the statute of limitations are barred. As to Counts VII and VIII (negligence and nuisance), ARTRA's motion for judgment on the pleadings is GRANTED. Finally, ARTRA's motion for summary judgment on the issue of SW's alleged failure to comply with the National Contingency Plan is DENIED, and ARTRA's motion for partial summary judgment as to drum removal costs and the 200, 600 and 700 areas is DENIED.

BACKGROUND

This case involves a dispute about who is responsible for paying for the cleanup of hazardous substances contaminating a 23-acre parcel of land located on Hollins Ferry Road in Baltimore, Maryland. The site has been used by various owners since the late 1940s for paint manufacturing. The defendant, now known as ARTRA, became an owner of the site through a series of mergers and corporate name changes beginning in approximately 1962. In 1980, ARTRA (which at the time was known as Dutch Boy) signed an agreement to sell its assets, including the subject property, to Sherwin-Williams, the current owner of the property. The sale agreement signed by the parties contains an assumption of liabilities clause.

During ARTRA's ownership of the property, hazardous substances were used and hazardous waste was generated, including toluene, xylene, methylene chloride (varnish remover), and trichloroethylene (TCE) waste that was shipped from the property as indicated by waste manifests from 1979 and a 1979 Waste Generation Study. These substances were primarily used as solvents. SW's expert, whose conclusions have been questioned by ARTRA's expert, determined that a large portion of the contamination on the property was caused by leaks from underground storage tanks (USTs) that began during ARTRA's ownership. These tanks were removed during SW's ownership and, at that time, there was evidence that several of the tanks contained holes and were leaking. An analysis of photographs taken during ARTRA's ownership shows open storage of drums, and "[e]vidence of what may be a recent flow of liquid(s)" in an area near one of the buildings at the site. The deposition testimony of several former Dutch Boy (now ARTRA) employees indicates that there was a leak in an underground storage tank, pipeline leaks, and leaking drums. Specifically, the employees stated that the contents of drums (including traffic paint and industrial finishes) sometimes spilled when palettes would break or forklifts would accidentally puncture them, splashing would occur when drums were filled with product, and pits dug in the ground were used to drain solvent wastewater from drums. According to the employees, these drums and tanks contained hazardous substances such as xylene, toluene, methylene chloride and other substances that have been found on the site. A spill prevention plan dated November 15, 1973 noted that "[t]here have been no spills greater than a few hundred gallons outside of buildings during the last 3 years" and "only one tank failure in the 25 years [sic] plant history."

Sherwin-Williams used many of the same chemicals in its paint manufacturing processes, including trichloroethane (TCA), toluene, methyl ethyl keytone (MEK), and methyl isobutyl keytone (MIBK). In the early 1980s, after SW took over ownership of the property, officials from the State Department of Health and Mental Hygiene, Environmental Health Administration (now Maryland Department of the Environment (MDE)) began to direct SW to clean up contamination at the site. Drum removal was ordered by the State in 1984 after a finding that SW was in violation of state law regarding the proper storage and removal of waste drums. On January 29, 1985, SW entered into a Consent Order with MDE in which SW was ordered to construct a drum storage pad, install monitoring wells, and pay a fine. In May 1985, the State brought an action against SW for the unpermitted discharge of water pollutants and controlled hazardous substances. The case was settled in 1986, and SW was ordered to pay a fine and to conduct environmental improvements at the facility. The State also ordered the removal of underground storage tanks (1986), and the excavation of contaminated soils (1988). In 1985-86, and from 1989-90, environmental consultants conducted site investigations at the direction of the State. According to assessments of monitoring data, methyl chloride, toluene, xylene, methyl ethyl keytone (MEK), methyl isobutyl keytone (MIBK), benzene, trichloroethylene (TCE), and trichloroethane (TCA) were detected in the soil and groundwater at the site. In 1990 the site was divided into five areas — the 100 Area, the 200 Area, the 300 Area, the 400 Area, and the 500 Area. Later, Areas 600 and 700 were designated. Monitoring, sampling, and hydrogeologic investigation work continued throughout this period, at the direction of the State. After suit was filed, and between 1992 and 1994, SW consultants conducted a pre-remedial design investigation required by the State. A "Technical Evaluation of Alternatives for Remediation of Area 200" was drafted in November of 1993, and a legal notice was placed in The Baltimore Sun on November 7, 1993, notifying the public of the opportunity to comment. Remediation began in the 200 Area in 1994. The same procedure was followed for the remediation of the 100/500 Area — a report was drafted and notice was placed in The Baltimore Sun on June 21-23, 1996, providing the opportunity for public comment. Remediation began on the 100/500 Area in late 1996 — early 1997.

SUMMARY JUDGMENT STANDARD

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when there is no genuine issue as to any material fact, and the moving party is plainly entitled to judgment in its favor as a matter of law. In Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), the Supreme Court explained that, in considering a motion for summary judgment, "the judge's function is not himself to weigh the evidence and determine the...