Tank Tech, Inc. v. Valley Tank Testing, L.L.C.

• Decision Date: 20 April 2018
• Docket Number: Case No. 2D16–2100
• Parties: TANK TECH, INC., a foreign corporation, Appellant, v. VALLEY TANK TESTING, L.L.C., a foreign limited liability company, Appellee.
• Court: Florida District Court of Appeals

244 So.3d 383

TANK TECH, INC., a foreign corporation, Appellant,

v.VALLEY TANK TESTING, L.L.C., a foreign limited liability company, Appellee.

Case No. 2D16–2100

District Court of Appeal of Florida, Second District.

Opinion filed April 20, 2018

Thomas J. Guilday, Robert D. Fingar, George W. Hatch, III, and Catherine B. Chapman of Guilday, Simpson, West, Hatch, Lowe & Roane, P.A., Tallahassee, for Appellant.

Christine A. Marlewski of Gray|Robinson, P.A., Tampa (withdrew after briefing); Andrew J. Mayts and Alissa M. Ellison of Gray|Robinson, P.A., Tampa (substituted as counsel of record), for Appellee.

MORRIS, Judge.

Tank Tech, Inc., appeals a final summary judgment entered in favor of Valley Tank Testing, L.L.C. (Valley Tank), on claims of equitable subrogation (count I), negligence (count III), and indemnification (count IV).¹ The complaint was the product of a dispute between Tank Tech and Valley Tank regarding which of the two entities caused damage to underground petroleum storage tanks (USTs) at various Circle K stores. Tank Tech had been hired to modify the USTs by adding a second interior wall inside of them while Valley Tank had been hired to test the interstitial space between the original UST walls and the newly added walls. As a result of the damage, Tank Tech was required to repair the damaged USTs. Tank Tech then sued Valley Tank to recover the repair costs and other losses. Ultimately, the trial court entered summary judgment on the claims.

On appeal, Tank Tech argues that summary judgment was improper because (1) there were genuine issues of material fact regarding the equitable subrogation claim; (2) the trial court erred in finding that Valley Tank owed no duty to Tank Tech and that there was no factual basis to show that Valley Tank was negligent in its testing of the USTs; (3) Valley Tank's failure to meet the presumption set forth in Public Health Trust of Dade County v. Valcin, 507 So.2d 596 (Fla. 1987), precluded entry of summary judgment; and (4) there were genuine issues of material fact regarding which of the two entities caused the damage for purposes of the indemnification claim. We agree with Tank Tech on the issue of equitable subrogation and thus reverse the final summary judgment entered on that claim. However, for the reasons explained herein, we conclude that the trial court did not err in granting final summary judgment on the claims for negligence and indemnification. We do not address the remaining issues raised by Tank Tech as they either lack merit or do not materially contribute to our disposition.

BACKGROUND

USTs are heavily regulated by both the federal and state governments in an effort to minimize the impact on the environment and the health and welfare of the surrounding community. See, e.g., 42 U.S.C. § 6991 (1995) ; Fla. Admin. Code. Ch. 62–761, et seq. The Florida Department of Environmental Protection (FDEP) adopted regulations requiring UST owners to either upgrade existing USTs with a secondary containment system or to close the UST systems on or before December 31, 2009. See Fla. Admin. Code R. 62–761.510(3) & (5).² Where secondary containment systems were employed, the regulations required UST owners to internally monitor the interstitial space between the original tank wall and the secondary tank wall. See Fla. Admin. Code R. 62–761.610, .640.³

Tank Tech manufactures and installs the Phoenix System, which is a technology approved by the FDEP to retrofit existing USTs with a secondary containment system. Valley Tank is an entity that performs the required testing of the interstitial space and was retained by the affected UST owners to perform the testing. Valley Tank used a procedure known as the Estabrook Method, which was approved as a testing method by the FDEP only "where the groundwater depth is verified." The Estabrook Method includes specifications related to the amount of pressure that is applied during the testing as well as to how the groundwater level affects the testing. Specifically, the Estabrook Method provides in relevant part that:

Test Pressure ... Pressure differential across tank wall is equal to the absolute value of vacuum applied to tank, plus pressure of tank excavation backfill on tank, plus groundwater pressure on tank, minus pressure of liquid in tank.

....

Groundwater Groundwater level in tank excavation backfill must be determined by observation well or soil probe in tank excavation backfill.

If groundwater level in tank excavation backfill is above bottom of tank or the groundwater level in the tank excavation backfill has not been determined, water sensor must be used and test time extended to ensure water [i]ngress detection during test.

Comments ... An observation well or soil probe in tank excavation backfill may help determine backfill material, water level in tank excavation backfill, and free product.... More than 4 psi pressure differential across the tank wall at any location in the tank could damage the tank.

The groundwater level table is an important factor during testing because the Estabrook Method applies a vacuum to the tank, causing the tank walls to flex inward. Likewise, water located outside of the tank puts pressure on the exterior tank walls causing them to deflect inward.

After retrofitting the affected tanks with the Phoenix System, Tank Tech was notified by Circle K and other customers that USTs were failing. Tank Tech investigated and determined that there was a correlation between cracks appearing in the USTs and high water level tables. In an effort to learn about how the affected USTs were tested, Tank Tech had one of its employees attend a course on the Estabrook Method. Tank Tech alleges that it learned that Valley Tank was testing the affected USTs as if they were located in a dry hole and that Valley Tank had not been making an allowance for groundwater pressure. Tank Tech hired John Cignatta, P.E., Ph.D., who opined in an affidavit that if excessive vacuum force was used, it would cause the tank walls to repeatedly flex inward and that, over time, the structural integrity of the tanks would break down, resulting in cracks that could allow fuel to enter the interstitial space. Dr. Cignatta also opined that if the Estabrook Method had been properly employed in a manner not contrary to manufacturer recommendations or FDEP protocols, the damage to the affected tanks would not have occurred.

Valley Tank acknowledged that it did not verify groundwater depth prior to testing. However, Valley Tank maintains that it did not damage the tanks during its testing. Valley Tank contends that the creator of the Estabrook Method, Brad Estabrook, opined in an affidavit that groundwater levels do not need to be factored in when employing the Estabrook Method. Valley Tank also argues that Tank Tech presented no evidence that the groundwater levels at the sites of any of the affected tanks contributed to Valley Tank's pressurizing the tanks at a level that would result in damage. Indeed, Valley Tank asserts that Tank Tech failed to rule out other potential causes of the cracks or pinholes in the affected tanks.

Although Tank Tech and Valley Tank each had their own contracts with Circle K to provide different services, Tank Tech and Valley Tank did not have a contract with each other. Notably, Tank Tech's contract with Circle K required Tank Tech to repair any damage to the containment systems installed on Circle K's USTs regardless of whether the damage was caused by an action and/or omission of Tank Tech or by a third party. It is undisputed that Circle K, in turn, was responsible to ensure that any integrity tests conducted on USTs containing the Phoenix System were carried out pursuant to applicable regulations and recommendations.

Ultimately, Valley Tank moved for summary judgment, which the trial court granted. Tank Tech filed a motion for rehearing and/or reconsideration as to counts I, III, and IV. The trial court granted rehearing, but upheld its earlier ruling and added that Valley Tank did not owe a duty to Tank Tech. The trial court also made an oral finding that it did not believe that Tank Tech had established a factual basis that Valley Tank was negligent. Final judgment was entered in favor of Valley Tank, resulting in this appeal.

ANALYSIS

The party moving for summary judgment has the burden of demonstrating that there is no genuine issue of material fact. Holl v. Talcott, 191 So.2d 40, 43 (Fla. 1966). "The proof must be such as to overcome all reasonable inferences which may be drawn in favor of the opposing party." Id. (citing Harvey Bldg., Inc. v. Haley, 175 So.2d 780 (Fla. 1965) ). Once a party moving for summary judgment presents competent, substantial evidence to support the motion, "the opposing party must come forward with counterevidence sufficient to reveal a genuine issue." Landers v. Milton, 370 So.2d 368, 370 (Fla. 1979) (emphasis added). "It is not enough for the opposing party merely to assert that an issue does exist." Id. (citing Harvey Bldg., Inc., 175 So.2d 780 ). Summary judgment should not be granted if there is any doubt about whether a genuine issue of material fact exists. See Pyjek v. ValleyCrest Landscape Dev., Inc., 116 So.3d 475, 477 (Fla. 2d DCA 2013). Rather, "[s]ummary judgment is [only] proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law." Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000) (citing Menendez v. Palms W. Condo. Ass'n, 736 So.2d 58 (Fla. 1st DCA 1999) ). We therefore review an order granting summary judgment de novo. Id.

I. Valley Tank was not entitled to summary judgment on the claim of equitable subrogation.

"Subrogation provides an equitable remedy for restitution to one who in the performance of some duty has discharged a legal obligation which should have been met, either wholly or partially, by another." W. Am. Ins. Co. v. Yellow Cab Co. of Orlando, Inc., 495 So.2d...