State ex rel. Schmitt v. Zill, Inc.

• Decision Date: 09 June 2020
• Docket Number: WD 82850
• Citation: 603 S.W.3d 327
• Parties: STATE of Missouri, EX REL., Eric S. SCHMITT, Attorney General and Missouri Department of Natural Resources, Appellant, v. ZILL, INC., Respondent.
• Court: Missouri Court of Appeals

603 S.W.3d 327

STATE of Missouri, EX REL., Eric S. SCHMITT, Attorney General and Missouri Department of Natural Resources, Appellant,

v.ZILL, INC., Respondent.

WD 82850

Missouri Court of Appeals, Western District.

Opinion filed: June 9, 2020

Amanda Langenheim, for Appellants.

Bryan E. Mouber, Kansas City, for Respondent.

Division Three: Anthony Rex Gabbert, Presiding Judge, Edward R. Ardini, Jr., Judge and W. Douglas Thomson, Judge

EDWARD R. ARDINI, JR., JUDGE

The Missouri Department of Natural Resources ("DNR") appeals the judgment of the Circuit Court of Jackson County denying injunctive relief and civil penalties in a lawsuit brought by DNR against Zill, LLC ("Zill"), the owner and operator of a gas station in Kansas City, for an alleged petroleum spill. Finding no error, we affirm.

Factual and Procedural Background

In January 2015, residents living near 31st Street and Cleveland Avenue in Kansas City, Missouri, complained of a strong odor of petroleum vapors in their homes. DNR investigated and found the presence of liquid petroleum in the sewer lines. After excavating the area, crews removed 50-to-100 gallons of petroleum. DNR suspected that the source of the petroleum was Inner City Oil, a nearby gas station owned and operated by Zill.¹ DNR issued a Declaration of Hazardous Substance Emergency ("Declaration") to Zill, which instructed Zill to take remediation measures to stop the spill, abate the vapors in the nearby homes, and clean up the spilled petroleum.

Upon receiving the Declaration, Zill attempted to work with DNR by hiring a consultant to conduct tank tightness tests, site characterizations, and other remediation activities as requested by DNR.

DNR dug monitoring wells² near Zill's gas station and the Cleveland Avenue homes, and, upon testing the wells, DNR found petroleum present in several of them, including wells located on Zill's property. DNR also determined that the electronic monitoring system for Zill's underground storage tanks indicated a leak. Based on this information, DNR sued Zill, seeking, in Count I, injunctive relief for failing to abate the hazardous substance emergency; in Count II, reimbursement for cleaning the spilled petroleum; and, in Count III, injunctive relief and civil penalties for violation of the Underground Storage Tank Release Abatement regulations.³

After DNR filed suit, a technician employed by the manufacturer of Zill's underground storage tanks inspected the tanks and found a pinhole leak in one tank. The technician repaired the leak and concluded that leaked fuel had not escaped the outer rib of the tank. Based on this information, Zill provided inspection and site characterization reports to DNR and denied that it was the source of the petroleum in the sewer lines.

At trial, DNR presented evidence that an underground storage tank at Zill's gas station had a leak, that the geography at the gas station would cause released petroleum to migrate towards the affected homes, and that DNR did not believe the spilled petroleum could have come from an alternative source.

Zill presented expert testimony showing that the petroleum found in the monitoring wells contained lead and MTBE and was degraded such that it could not have been released from Zill's gas station during the time Zill owned the station.⁴ Zill also presented evidence showing that the geography of its gas station, which sits in a bowl at the top of a hill, would not have allowed for petroleum released from its tanks to flow toward the homes on Cleveland Avenue. Zill's expert, therefore, concluded that the petroleum found by DNR originated from another source.

The jury unanimously found that Zill was not responsible for the cleanup costs related to the spill (Count II),⁵ and the trial court entered its judgment on Counts I and III in favor of Zill. DNR appeals. Additional facts will be discussed throughout this opinion.

Discussion

DNR raises three points on appeal. In its first two points, DNR alleges that the trial court misapplied the law in denying DNR the injunctive relief it sought in Counts I and III. In Point III, DNR asserts that the trial court erred in granting Zill's motion for directed verdict on DNR's claim for civil penalties under Count III of its amended petition. We find no error.

Points I & II

In Point I, DNR alleges that the trial court erred in finding Zill not liable for the petroleum spill, arguing that the trial court misapplied the law by requiring DNR to prove that Zill was the sole source of contamination involved in the hazardous substance emergency. In Point II, DNR claims that the trial court erred in denying its request for injunctive relief pursuant to the Underground Storage Tank Release Abatement regulations, arguing that the trial court misapplied the law by considering only portions of the regulations DNR alleged Zill violated and by conflating Counts I and III in DNR's amended petition. Because both of these points allege the trial court misapplied the law, we address them together.

Standard of Review

"The judgment of the trial court in a court-tried civil case will be sustained ‘unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law." Swallow Tail, LLC v. Mo. Dep't of Conservation , 522 S.W.3d 309, 314 (Mo. App. W.D. 2017) (quoting Murphy v. Carron , 536 S.W.2d 30, 32 (Mo. banc 1976) ). "A claim that the judgment erroneously declares or applies the law, [ ] involves review of the propriety of the trial court's construction and application of the law." Pearson v. Koster , 367 S.W.3d 36, 43 (Mo. banc 2012) (citing White v. Dir. of Revenue , 321 S.W.3d 298, 308 (Mo. banc 2010) ). "This Court applies de novo review to questions of law decided in court-tried cases." Id. (citing StopAquila.org v. City of Peculiar , 208 S.W.3d 895, 899 (Mo. banc 2006) ).

Point I

In Point I, DNR claims that the trial court erroneously applied the law by "requir[ing] DNR to prove Zill was the source of all the contamination identified in the area, when the [statute] only required DNR to prove that Zill's hazardous substance was involved in the hazardous substance emergency."

In its judgment denying DNR injunctive relief, the trial court made the following relevant findings:

37. This court finds there was no credible evidence to establish by a preponderance of the evidence that a release from Zill's gas storage tank(s) was the cause of the leak of free-floating petroleum product observed by [DNR] in January, 2015.

...

44. Plaintiffs alleged, but failed to prove by a preponderance of the evidence, that a release of more than fifty gallons of liquid petroleum product was released from Zill's underground tanks or property at any relevant time prior to January, 2015. There was no credible evidence that Zill's underground tank or stored petroleum product was the source of the free-floating petroleum product observed by [DNR] in January, 2015.

45. There was no credible evidence to establish by a preponderance of the evidence that the prior release from Zill's land in 2006 was the source of the free petroleum product that appeared in the lateral and main sewer line or in the excavation hole at 30^th and Cleveland in January, 2015.

46. There is no credible evidence to establish by a preponderance of the evidence that Zill's property, land, storage tanks or stored petroleum was the source of petroleum product or vapors reported on the west side of Cleveland in 2014, 2015 or 2016.

The Hazardous Substance Cleanup statute provides that DNR "[m]ay require the person having control over a hazardous substance involved in a hazardous substance emergency to clean up the hazardous substance and take any reasonable actions necessary to end a hazardous substance emergency[.]" § 260.510(2), RSMo.⁶ A "hazardous substance emergency" is defined as "[a]ny release of petroleum ... in excess of fifty gallons[.]" § 260.500(6)(b), RSMo. A "person having control over a hazardous substance" includes "any person ... storing, ... a hazardous substance when a hazardous substance emergency occurs[.]" § 260.500(8), RSMo. "Release" is defined as "any threatened or real emission, discharge, spillage, leakage, pumping, pouring, emptying or dumping of a substance into or onto the land, air or waters of the state ... unless the substance is confined and is expected to stay confined to property owned, leased or otherwise controlled by the person having control over the substance[.]" § 260.500(9), RSMo.

DNR argues in Point I that the trial court improperly increased DNR's burden by requiring it to show that Zill was the only source of the contamination found in the area of the Cleveland Avenue homes. We agree with DNR that it is not necessary for the agency to prove that a defendant was the sole source of all of the hazardous substances involved in a hazardous substance emergency. However, we reject DNR's view that the trial court applied a different legal standard.⁷ Indeed, a review of the judgment makes clear that the trial court's ruling in favor of Zill was not the product of a misplaced view that DNR was required to establish that Zill was solely responsible for all of the released petroleum found in the impacted area but rather was based on its determination that DNR had failed to establish that Zill was responsible for any of the petroleum involved in the hazardous substance emergency.⁸ In so doing, the trial court properly applied the law.

Point I denied.

Point II

In Point II, DNR alleges that the trial court erred in denying the injunctive relief it sought against Zill in Count III for violating the regulations pertaining to underground storage tanks, arguing that the trial court erroneously applied the law by "focus[ing] only on part of the regulatory requirements Zill was alleged to have violated and conflat[ing] Counts I and III in DNR's Amended Petition."

Count I of DNR's amended petition sought injunctive relief based...