Vine Street v. Keeling ex rel. Estate of Keeling

Decision Date06 November 2006
Docket NumberNo. 6:03-CV-223.,6:03-CV-223.
Citation460 F.Supp.2d 728
PartiesVINE STREET, LLC, Plaintiff, v. James R. KEELING, as Independent Executor of the ESTATE OF David Bart Keeling, Sr., Deceased; Maytag Corporation; Borg-Warner Corporation; Fedders Corporation; and Dow Chemical Company, Defendants.
CourtU.S. District Court — Eastern District of Texas

Robert Scott Davis, Flowers Davis LLP, Tyler, TX, Robert Edward Human, Samson, Tulsa, OK, for Plaintiff.

Elizabeth Weathers, Michael C. Diksa, E. Paul Cauley, Jr., Sedgwick Detert Moran & Arnold, Dallas, TX, Kenneth Carl Baker, Baker & Patterson, Jonathan Burton Shoebotham, Thompson & Knight, Houston, TX, Brent Clifton Howard, Howard & Davis, Tyler, TX, for Defendants.


DAVIS, District Judge.

Plaintiff Vine Street, LLC ("Vine Street") brought this action against Defendants James R. Keeling, as independent executor of the estate of David Bart Keeling, Sr., deceased ("Keeling Estate"), Maytag Corporation ("Maytag"), Borg-Warner Corporation ("Borg-Warner"), Fedders Corporation ("Fedders"), and Dow Chemical Company ("Dow") (Borg-Warner, Fedders, and Maytag referred to collectively as "Defendants" or "the remaining Defendants").1 The matter came for trial on the merits without a jury and was taken under submission. After considering the testimony, exhibits, arguments of counsel, and supporting memoranda, the Court makes the following Findings of Fact and Conclusions of Law pursuant to Federal Rule of Civil Procedure 52(a).2


Vine Street is a Texas corporation owned by various individual members of the Roosth family and managed by the Roosth Production Company, of which Steven C. Roosth is Vice President.3 Vine Street owns 914 West Glenwood Boulevard ("West Glenwood property") and 1604 South Vine Avenue ("South Vine property"), adjoining land parcels in Tyler, Texas.4 From 1949 through 1996, the Roosth Group, composed of individuals and trusts related to the Roosth family, and the Genecov Group, composed of individuals and trusts related to the Genecov family, jointly owned the West Glenwood property and at some point during this period owned and/or managed that property under the name B.M. & R. Interests.5

In 1961, the Roosth and Genecov Groups constructed a new building on the West Glenwood property specifically for use as a "Norge Laundry & Cleaning Village" facility by College Cleaners, a Tyler-area business owned and operated by David Bart Keeling, Sr. ("D.B.Keeling, Sr.").6 The construction included installation of sewer lines and other building utilities.7 Beginning in March 1961, the Roosth and Genecov Groups leased the West Glenwood property to "D.B. Keeling, d/b/a College Cleaners and Washeteria and Laundry" to use as a laundromat and cleaners.8 The facility housed Norge-manufactured commercial laundry equipment, including thirty washing machines, ten dryers, and six-to-eight coin-operated, self-service, automatic dry-cleaning machines.9 College Cleaners continuously operated the facility through a group of successive lease agreements with the Roosth and Genecov Groups' respective trustees until November 1975.10 During this same period, the South Vine property was used as a gasoline service station.11 Though both properties had subsequent lessees and uses, the West Glenwood property was not used for dry-cleaning operations before 1961 or after 1975, and the South Vine property was not used as a service station after 1980.12

In 1996, the Roosth and Gencov Groups partitioned all their jointly-owned properties, including the West Glenwood property and transferred ownership of the property to Steven Roosth, one of the Roosth family trustees.13 In 1998, the Rite-Aid pharmacy chain considered purchasing the West Glenwood and South Vine properties and commissioned a series of environmental site assessments.14 Rite-Aid ultimately declined to purchase the properties, and it is unknown why.15

In May 2001, Steven Roosth entered a contract with the M.M. Mitchell Family Partnership, LP, to purchase the then-vacant South Vine property.16 In anticipation of the acquisition, Steven Roosth commissioned an environmental assessment team to sample the soil and groundwater underlying the South Vine property for the presence of petroleum hydrocarbons.17 The assessment team found evidence of another substance in the soil and groundwater: tetrachloroethylene (also known as perchloroethylene, trichloroethylene, "PCE," or "PERC"), a non-naturally-occurring, dense non-aqueous phase liquid chemical commonly found in dry-cleaning fluids.18 After further sampling of additional up-gradient locations on the South Vine property, the assessment team determined that the adjoining West Glenwood property was the source of the PERC contamination.19 The data indicated the presence of a PERC plume in the soil and groundwater, with the highest concentrations located near the exit of an underground drainage line at the former drycleaning facility.20

In July 2001 — during the environmental assessments and after discovery of the contamination on both properties — Steven Roosth and the Mitchell Family Partnership amended the contract for sale of the South Vine Property.21 The nature of this amendment was not disclosed to the Court. In November 2001, Steven Roosth assigned Vine Street the right of purchase of the South Vine property.22 Soon thereafter, the Mitchell Family Partnership transferred ownership of the South Vine property to Vine Street by warranty deed.23 In February 2002, Steven Roosth transferred the West Glenwood property to Vine Street, retroactive to January 1, 2002.24

In March 2002, Vine Street notified what is now the Texas Commission on Environmental Quality ("TCEQ") of the contamination, applied to participate in the TCEQ's voluntary cleanup program,25 and retained environmental consultants to prepare a comprehensive assessment of the contamination and a plan for its remediation.26 The TCEQ admitted Vine Street into the voluntary cleanup program in April 2002.27

Vine Street commenced this action in May 2003 by suing the Keeling Estate to recover the costs of such cleanup and remediation. In 2004, Vine Street added Maytag, Fedders, and Borg-Warner as defendants. Defendants each at one time or another exerted ownership over Norge, a leading manufacturer of dry-cleaning and laundry equipment from 1961 through 1975.28 Vine Street asserts that each Defendant is liable because each, through the Norge Division, provided defective equipment to D.B. Keeling, Sr.29

Vine Street contends that defective design of "water separators" in the Laundromat's coin-operated Norge dry-cleaning machines led to the discharge of PERCladen wastewater into the West Glenwood property's sewage drainage pipes, which allowed the PERC to corrode those pipes, escape into the surrounding soil, and contaminate the West Glenwood property and surrounding lots. The Roosth and Gencov Groups have assigned Vine Street their legal rights and interests in all existing and potential causes of action relating to the environmental contamination of properties conveyed to the Groups in the 1996 partition agreement.30 The assignment is retroactively effective as of the date of the partition agreement.31

Vine Street seeks: (1) recovery of its "costs of response" to the PERC contamination, under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") (42 U.S.C. §§ 9601, et seq.), and the Texas Solid Waste Disposal Act (the "SWDA") (THSC §§ 361.001, et seq.); (2) a declaration of Defendants' responsibility for future response costs Vine Street incurs in monitoring and cleaning up the contamination under CERCLA Section 113(g) (42 U.S.C. § 9613(g)), the federal Declaratory Judgment Act (28 U.S.C. §§ 2201, et seq.), and the Texas Uniform Declaratory Judgments Act, (TEX. CIV. PRAC. & REM.CODE ("TCPRC") §§ 37.001, et seq.); (3) recovery of its attorneys' fees and expenses incurred in litigating this suit; and (4) all other costs and expenses of suit, including pre judgment and post-judgment interest at the highest rates permitted by applicable law. The Court has jurisdiction over Vine Street's federal claims pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 9613(b) and over Vine Street's state-law claims pursuant to 28 U.S.C. § 1367.

CERCLA Liability

Congress enacted CERCLA to encourage timely cleanup of hazardous waste sites by placing cleanup costs on those responsible for creating or maintaining the hazardous condition. Consol. Edison Co. v. UGI Utils., Inc., 423 F.3d 90, 94 (2d Cir.2005). CERCLA also encourages private parties to assume financial responsibility for such cleanups by allowing them to seek recovery from others. Key Tronic v. United States, 511 U.S. 809, 819 n. 13, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994). Federal courts interpret CERCLA liberally, consistent with Congress's "`overwhelming remedial' statutory scheme."32

This Court has already ruled that Vine Street may seek recovery of its response costs through an implied right of contribution under CERCLA Section 107(a).33 Section 107(a) provides:

Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section

. . . .

(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment ... of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances ...

(4) ... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for...

. . . . (B) any ... necessary costs of response incurred by any other person consistent with the national contingency plan ....

42 U.S.C. § 9607(a...

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