The Pantry, Inc. v. Stop-N-Go Foods, Inc.
| Decision Date | 22 October 1991 |
| Docket Number | No. IP 88-1345-C.,IP 88-1345-C. |
| Citation | 777 F. Supp. 713 |
| Parties | THE PANTRY, INC., Plaintiff, v. STOP-N-GO FOODS, INC., and Tri-state Stop-N-Go, Inc., Defendants. |
| Court | U.S. District Court — Southern District of Indiana |
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William C. Barnard, Frank J. DeVeau, Donald C. Biggs, Sommer & Barnard, P.C., Indianapolis, Ind., for plaintiff.
Robert F. Wagner, R. Robert Stommel, Lewis Bowman St. Clair & Wagner, Indianapolis, Ind., for defendants.
MEMORANDUM ENTRY DISCUSSING COURT'S DISPOSITION OF DEFENDANTS' MOTIONS TO DISMISS COUNTS III, IV AND V OF PLAINTIFF'S AMENDED COMPLAINT
Each of the matters discussed below is before the court on defendants' motions to dismiss, filed May 30, 1989 and August 5, 1991.
Count I of plaintiff's complaint states a claim for damages resulting from defendants' breach of a purchase agreement. Count III, pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201 (Supp. 1990) (the "Act"), requests a declaratory judgment that the defendants breached the purchase agreement. Defendants move the court to dismiss count III because they argue the declaratory judgment claim is inappropriately raised given the remedy provided by the breach of contract claim.
Although the Act allows a party to request declaratory relief and other relief in the same action, the court may use its discretion to determine whether declaratory relief is "appropriate" when other adequate remedies are available. Fed.R.Civ.P. 57. When declaratory relief and another remedy are substantially similar, the court may exercise its discretion to dismiss the declaratory judgment claim. Newton v. State Farm Fire & Casualty Co., 138 F.R.D. 76 (E.D.Va.1991).
The Newton court considered an issue similar to that presented in this matter when deciding whether to dismiss plaintiffs' declaratory judgment claim. Plaintiffs claimed that defendant breached their duty under an insurance contract; in addition, plaintiffs requested a declaration of their rights under the insurance policy. The thrust of both claims was that the defendant insurance company owed plaintiffs coverage for their loss. The court reasoned that determination of the breach of contract claim would effectively resolve any questions related to an interpretation of the insurance contract. Id. at *77. Thus, the declaration of rights under the contract was not a legal issue with "sufficient immediacy and reality" to justify continuance of the declaratory judgment portion of the suit. Id.
In sum, the court held that the suit presented factual questions more appropriately considered under a breach of contract theory, because declaratory relief would not terminate the dispute as to whether the plaintiff's insurance claim required payment from the defendant. Id. Although the superfluous declaratory judgment claim would not cause any material harm, the Newton court found that allowing it to "linger" would be unnecessary, would not promote judicial economy, would confuse the issues at trial and promote piecemeal consideration of the issues. Id. at n. 5. Given these considerations, the court used its discretion to dismiss the declaratory judgment claim.
In this case, the declaratory judgment claim is inappropriately raised because the plaintiff may be fully compensated if it prevails on the breach of contract claim. Plaintiff's argument that the cost of remediation is sufficiently inestimable to require trial of an additional legal theory is unpersuasive. Plaintiff may prove its damages as in any other breach of contract action requiring estimation of future losses. Determination of the breach of contract claim will sufficiently and effectively resolve the issues presented in this matter.
Therefore, defendants' motion to dismiss count III of plaintiff's complaint will be granted.
Count IV of plaintiff's complaint seeks the equitable relief of rescission. Plaintiff claims the parties entered the Purchase Agreement under a mutual mistake and that defendants' material, substantial breach goes to the heart of the parties' agreement. Defendants move to dismiss count IV because defendants claim plaintiff may not request a legal remedy (count I) and an inconsistent equitable remedy (count IV) in the same action.
Defendants' argument contradicts F.R.C.P. 8(e)(2) and also mistakes the time at which a party must elect between alternative or inconsistent remedies. Plaintiff has sufficiently stated independent claims for breach of contract and for rescission. Rule 8(e)(2) allows a party to plead alternative theories of relief; therefore, both of these independent claims may be stated in a single complaint. Defendants have cited no authority to support their statement of a "long-settled rule that a claim for an equitable remedy may not be maintained when the plaintiff has an adequate remedy at law." Reply Brief at 6. Of course, at some point both claims cannot be "maintained"; however, that point is not met when the matter is in the pleading stage.
When a matter is in the pleading stage, a plaintiff may plead alternative legal and equitable theories of relief because it is unclear which remedy will be supported by the evidence. A party must elect between inconsistent forms of relief when both forms of relief become ripe to choose between them. The axiomatic rule that equitable relief may not be granted when adequate legal relief exists does not affect the viability of either type of claim at the pleading stage. Media General, Inc. v. Tanner, 625 F.Supp. 237 (W.D.Tenn.1985) (). Count I and count IV each state claims upon which relief may be granted. Thus, a motion to dismiss count IV on grounds of inconsistency must fail.
After the Indiana Legislature amended an environmental statute during the 1991 General Assembly, plaintiff amended its complaint to add a claim under the new law. Effective July 1, 1991, an amendment to the Underground Storage Tank ("UST") chapter of Indiana's environmental statutes allows a current UST owner to voluntarily clean-up a contaminated site and then seek contribution from the person who owned the UST at the time the release occurred. Ind.Code Ann. § 13-7-20-21(b) (Burns Supp.1991). In addition, the amendment allows the current owner to recover attorneys' fees arising from the contribution action. Prior to the amendment, the statute allowed a current owner to recover from the prior owner only after the state required the current owner to take a corrective action.
Plaintiff added count V to the complaint, which claims the amendment allows the plaintiff to recover all response costs associated with remediating contaminated sites purchased from the defendant. Defendant moved to dismiss count V for failure to state a claim. Defendant argued that the amendment cannot apply retroactively to create new liability. The petroleum releases at issue occurred prior to the effective date of the amendment; further, plaintiff incurred and claimed response costs prior to the effective date of the amendment. Defendants argue that the amendment does not contain any language indicating that the legislature intended the amendment to apply retroactively; therefore, because Indiana law presumes prospective application of statutes, plaintiff has failed to state a valid claim under the amendment. For the reasons below, defendants' motion to dismiss count V is denied; however, plaintiff's claim under the amendment is limited to response costs and attorneys' fees incurred after the effective date of the amendment.
The analysis below proceeds against a backdrop of statements made by Indiana courts regarding retroactive application of statutes. Indiana law has firmly and consistently held that a statute is presumed to operate prospectively only, unless the statute explicitly states otherwise. Manns v. State Dept. of Highways, 541 N.E.2d 929 (Ind.1989); Gosnell v. Indiana Soft Water Serv., Inc., 503 N.E.2d 879 (Ind.1987); International Fidelity Ins. Co., Inc. v. State, 567 N.E.2d 1161 (Ind.Ct.App.1991); Rogers v. R.J. Reynolds Tobacco Co., 557 N.E.2d 1045 (Ind.Ct.App.1990); Bailey v. Menzie, 505 N.E.2d 126 (Ind.Ct.App.1987). Retroactive application is the exception; laws are applied prospectively absent strong and compelling reasons. Arthur v. Arthur, 519 N.E.2d 230, 231 (Ind.Ct.App. 1988), aff'd, 531 N.E.2d 477 (Ind.1988).
Indiana courts adhere to a strict rule of construction against retroactive operation and will prohibit such unless the legislature's intention to have the statute apply retroactively is unequivocally and unambiguously shown by necessary implication. Turner v. Town of Speedway, 528 N.E.2d 858, 863 (Ind.Ct.App.1988). Under certain conditions statutes may be applied retroactively if the legislature so intended but yet failed to indicate in the language.
A statute must be so construed as to make it effect the purpose for which it was enacted, and if necessary to that end, it will be applied to past as well as to future transactions, although it does not in terms so direct, unless to do so will impair some vested right or violate some constitutional guaranty.
Connecticut Mut. Life Ins. Co. v. Talbot, 14 N.E. 586, 589, 113 Ind. 373, 378 (1887); Standard Accident Ins. Co. v. Miller, 170 F.2d 495, 497 (7th Cir.1948); Hiatt v. Howard, 8 N.E.2d 136, 138, 104 Ind.App. 167, 171 (1937). Thus, Indiana law prohibits impairment of vested rights under any circumstance, yet allows retroactive application of an amendment if it is clear the legislature intended the amendment to operate upon prior conduct.
The 1991 amendment to Ind.Code §...
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