Valbruna Slater Steel Corp. v. Joslyn Mfg. Co.

• Citation: 804 F.Supp.2d 877,73 ERC 1836
• Decision Date: 11 April 2011
• Docket Number: No. 1:10–CV–00044 JD.,1:10–CV–00044 JD.
• Parties: VALBRUNA SLATER STEEL CORP. and Fort Wayne Steel Corp., Plaintiffs, v. JOSLYN MANUFACTURING CO., et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

73 ERC 1836

804 F.Supp.2d 877

VALBRUNA SLATER STEEL CORP. and Fort Wayne Steel Corp., Plaintiffs,

v.JOSLYN MANUFACTURING CO., et al., Defendants.

No. 1:10–CV–00044 JD.

United States District Court, N.D. Indiana, Fort Wayne Division.

April 11, 2011.

David L. Hatchett, Michael J. Reeder, Hatchett & Hauck LLP, Indianapolis, IN, for Plaintiffs.

William Randall Kammeyer, Hawk Haynie Kammeyer & Chickedantz LLP, Fort Wayne, IN, Stephen D. Davis PHV, Steve Davis Law PC, Oak Brook, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

JON E. DeGUILIO, District Judge.

Now before the Court is the Motion for Summary Judgment filed by Defendant Joslyn Manufacturing Company LLC on May 14, 2010. [DE 19]; see also [DE 25] (converting Defendant's motion to a motion for summary judgment). Based on the following, Defendant's motion is GRANTED with respect to Count II and DENIED with respect to Counts I and III of the complaint.

Background

From 1928 to 1981 Joslyn Manufacturing Company owned and operated a steel mill at 2302 and 2400 Taylor Street (formerly known as 1701 McKinley Avenue) in Fort Wayne, Indiana (collectively “the site”). [DE 28–1 at 1; DE 28–2 at 11–13]. Plaintiffs—the site's current owners-claim that Defendants, Joslyn Manufacturing Company and its parent company and/or successors, contaminated the site's soil and groundwater with chlorinated solvents, metals, and other contaminants during the course of the steel mill's operation. Seeking to recover for cleanup costs that they have incurred or expect to incur, Plaintiffs seek contribution under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9607(a) (“CERCLA” or “Superfund”), and under Indiana's Environmental Legal Action statute, Ind.Code §§ 13–30–9–1 et seq. (“ELA”). [DE 1 at 5, 6]. Plaintiffs also seek a declaratory judgment pursuant to 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57, declaring that Defendants “are and will be liable for future costs, expenses, damages and attorneys' fees which are necessary to address and respond to the hazardous substances that continue to exist at or near the Site.” [DE 1 at 7].

On February 2, 1981, Joslyn Manufacturing Company sold the site to Slater Steels Corporation (“Slater”). In connection with this sale, the two companies signed an asset purchase agreement, in which Joslyn Manufacturing Company agreed to indemnify Slater for certain costs and expenses. [DE 20–1 at 19–22]. On several occasions between 1988 and 1999, Slater sought indemnification under this agreement for cleanup costs relating to alleged historical contamination of the site, but Joslyn Manufacturing Company denied these requests. [DE 28–6; DE 28–7]. On July 17, 2000, Slater filed suit against Joslyn Manufacturing Company in the Allen County, Indiana Superior Court (the “Slater suit”). [DE 28–9]. Counts I and II of that suit raised claims of contractual indemnification, while Count III brought an ELA claim under Indiana Code §§ 13–30–9–1. [DE 28–9]. On October 30, 2000, Joslyn Manufacturing Company filed a motion to dismiss Slater's claims. Id. at 1. On April 19, 2001, the court denied this motion with respect to Counts I and II. Id. at 4. But the Court granted the motion with respect to Count III, noting Joslyn Manufacturing Company's assertion that Slater's claim accrued in 1981 and that the ELA was enacted in 1998. The Court found “no evidence that the legislature intended for [the ELA] to be applied retroactively, and that therefore this claim must be dismissed as a matter of law.” ¹ Id. at 3, 4.

On June 2, 2003, Slater filed a Chapter 11 voluntary bankruptcy petition in the U.S. Bankruptcy Court for the District of Delaware. [DE 28–12]. At auction, Valbruna Slater Stainless Inc. (“VSSI”), Plaintiffs' corporate parent, purchased the site. The Slater–Valbruna Asset Purchase Agreement (“APA”) noted the existence of the Slater suit, and granted VSSI “the right to seek to become a party to the Lawsuit[.]” [DE 20–4 at 7]. On February 13, 2004, the Bankruptcy Court approved the APA and held that Valbruna was not a successor in interest to Slater except as detailed in the APA, and therefore had no other liability for Slater's acts, omissions, or liabilities. [DE 28–15 at 7]. In April 2004, Plaintiffs Valbruna Slater Steel Corporation and Fort Wayne Steel Corporation acquired the site from VSSI. [DE 28–5 at 3].

On December 22, 2004, Joslyn Manufacturing Company filed a motion to dismiss the Slater suit for failure to prosecute, pursuant to Indiana Trial Rule 41(E). [DE 28–17]. On February 2, 2005, the Allen County Court granted this motion and dismissed the Slater suit with prejudice. [DE 20–6].

Plaintiffs filed the present suit on February 11, 2010. [DE 1]. On May 14, 2010, Defendant Joslyn Manufacturing Company LLC filed a motion to dismiss the present suit, claiming that the Allen County Court's dismissal of the Slater suit bars the present action under the doctrine of res judicata, or claim preclusion. [DE 19]. On June 8, 2010, the Court deemed the motion to dismiss converted to a motion for summary judgment. [DE 25]. Plaintiffs filed a response on August 16, 2010, and Defendant filed a reply on August 30, 2010. [DE 27; DE 29].

Jurisdiction

This Court has jurisdiction over Plaintiffs' complaint. Count I raises a CERCLA claim pursuant to 42 U.S.C. § 9607(a), while Count III requests declaratory judgment pursuant to 28 U.S.C. § 2201 and Federal Rule of Civil Procedure 57. Because Counts I and III pose federal questions, the Court has original jurisdiction over these claims. 28 U.S.C. § 1331. Count II raises a state-law ELA claim, which derives from the same nucleus of operative fact as the CERCLA claim and forms part of the same case or controversy. Therefore, the Court has supplemental jurisdiction over this claim pursuant to 28 U.S.C. § 1367(a). See City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 164–66, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997) (finding supplemental jurisdiction in analogous circumstances).

Summary Judgment Standard

Pursuant to Federal Rule of Civil Procedure 56(a), summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” “In other words, the record must reveal that no reasonable jury could find for the non-moving party.” Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir.1994) (citations and quotation marks omitted).

The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying” the evidence which “demonstrate[s] the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “Substantive law determines which facts are material; that is, which facts might affect the outcome of the suit under the governing law.” Brown v. City of Lafayette, No. 4:08–CV–69, 2010 WL 1570805, at *2 (N.D.Ind. Apr. 16, 2010) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).

Once the moving party has met this burden, the nonmoving party may not rely merely on allegations or denials in its own pleading; rather, its response must set out specific facts showing a genuine issue for trial. Fed.R.Civ.P. 56(c)(1); Beard v. Whitley Cnty. REMC, 840 F.2d 405, 410 (7th Cir.1988). To establish a genuine issue of fact, the nonmoving party must come forward with specific facts showing that there is a genuine issue necessitating trial, not “simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); First Nat'l Bank of Cicero v. Lewco Secs. Corp., 860 F.2d 1407, 1411 (7th Cir.1988).

If the nonmoving party fails to establish the existence of an essential element on which it bears the burden of proof at trial, summary judgment is proper—even mandated. Massey v. Johnson, 457 F.3d 711, 716 (7th Cir.2006) (citing Celotex, 477 U.S. at 322–23, 106 S.Ct. 2548 (holding that a failure to prove one essential element “necessarily renders all other facts immaterial”)). In ruling on a motion for summary judgment, a court must view all facts in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir.1999); NUCOR Corp. v. Aceros Y Maquilas de Occidente, 28 F.3d 572, 583 (7th Cir.1994).

Res Judicata Requirements

The full faith and credit statute, 28 U.S.C. § 1738, generally determines the preclusive effect of a state court judgment in a subsequent federal suit. In relevant part, that section directs that “[t]he ... judicial proceedings of any court of any such state ... shall have the full faith and credit within the United States and its territories as they have by law or usage in the courts of such state ... from which they are taken.” The federal court therefore must apply the claim preclusion law of the forum state of the prior judgment. Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 375, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985); Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984). In this case, the Court applies Indiana law because the Slater suit was decided by Allen County Court—an Indiana state court. [DE 28–9].

The rationale underlying the doctrine of res judicata, or claim preclusion, is the prevention of repetitive litigation of what is essentially the same dispute. Hermitage Ins. Co. v. Salts, 698 N.E.2d 856, 859 (Ind.Ct.App.1998) (citing Scott v. Scott, 668 N.E.2d 691, 699 (Ind.Ct.App.1996)). “The doctrine of res judicata bars relitigation of a claim after a final judgment has been rendered when the subsequent action involves the same claim between the same parties or their privities.” Id....