Wond Family Kapalama, LLC v. Cont'l Tire the Americas, LLC, CIVIL NO. 16-00676 LEK-KJM
| Decision Date | 01 May 2018 |
| Docket Number | CIVIL NO. 16-00676 LEK-KJM |
| Parties | WOND FAMILY KAPALAMA, LLC a Hawai`i limited liability company, Plaintiff, v. CONTINENTAL TIRE THE AMERICAS, LLC, an Ohio limited liability company, Defendant. CONTINENTAL TIRE THE AMERICAS, LLC, an Ohio limited liability company, Third-Party Plaintiff, v. MELIM LTD., Third-Party Defendant. |
| Court | U.S. District Court — District of Hawaii |
Before the Court are: Defendant/Counterclaimant/Third-Party Plaintiff Continental Tire the Americas, LLC's ("Continental Tire") Motion for Summary Judgment as to Counts I, II, and III of Plaintiff's Complaint ("Continental Tire's Counts I-III Motion"); [filed 10/6/17 (dkt. no. 56);] Continental Tire's Motion for Summary Judgment as to Count IV of Plaintiff's Complaint ("Continental's Count IV Motion"); [filed 10/6/17 (dkt. no. 60);] Continental Tire's Motion for Summary Judgment as to Count V of Plaintiff's Complaint ("Continental's Count V Motion"); [filed 10/6/17 (dkt. no. 58);] Plaintiff/Counterclaim Defendant Wond Family Kapalama, LLC's ("Wond Family") Motion for Partial Summary Judgment Re: Counts I, II, and III of Complaint ("Wond Family's Counts I-III Motion"); [filed 10/11/17 (dkt. no. 66);] and Wond Family's Motion for Partial Summary Judgment Re: Count IV of Complaint ("Wond Family's Count IV Motion"), [filed 10/6/17 (dkt. no. 62)].
The following memoranda in opposition were filed: Wond Family's memorandum in opposition to Continental's Count IV Motion ("Wond Family's Count IV Opposition"); [filed 11/27/17 (dkt. no. 76);] Continental Tire's memorandum in opposition to Wond Family's Count IV Motion ("Continental's Count IV Opposition"); [filed 11/27/17 (dkt. no. 78);] Wond Family's memorandum in opposition to Continental's Count V Motion ("Wond Family's Count V Opposition"); [filed 12/6/17 (dkt. no. 80)]; Wond Family's memorandum in opposition to Continental's Counts I-III Motion ("Wond Family's Counts I-III Opposition"); [filed 12/18/17 (dkt. no. 83);] and Continental Tire's memorandum in opposition to Wond Family's Counts I-III Motion ("Continental's Counts I-III Opposition"), [filed 12/18/17 (dkt. no. 85)]. On December 13, 2017, Continental Tire filed a replyin support of Continental's Count V Motion ("Continental's Count V Reply"). [Dkt. no. 82.]
Continental's Count IV Motion and Wond Family's Count IV Motion came on for hearing on December 18, 207, and Continental's Count V Motion came on for hearing on December 27, 2017. On January 7, 2018, this Court issued an entering order ("1/7/18 EO") finding Continental's Counts I-III Motion and Wond Family's Counts I-III Motion suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i ("Local Rules"). [Dkt. no. 97.] The 1/7/18 EO also informed the parties that Continental's Counts I-III Motion and Wond Family's Counts I-III Motion were denied. On January 9, 2018, this Court issued an entering order informing the parties of its rulings on Continental's Count IV Motion, Wond Family's Count V Motion, and Continental's Count V Motion ("1/9/18 EO"). [Dkt. no. 98.] The instant Order supersedes the 1/7/18 EO and the 1/9/18 EO. For the reasons set forth below, Wond Family's Count IV Motion is granted in part and denied in part, and Continental's Counts I-III Motion, Wond Family's Counts I-III Motion, Continental's Count IV Motion, and Continental's Count V Motion are denied.
Wond Family filed its Complaint on December 28, 2016.1 It brings this action pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9607, et seq., and the Hawai`i Environmental Response Law ("HERL"), Haw. Rev. Stat. Chapter 128D.2 [Complaint at ¶ 1.] Wond Family asserts federal question jurisdiction over the CERCLA claim and supplemental jurisdiction over the state law claims. [Id. at ¶¶ 6-7 (citing 28 U.S.C. §§ 1331, 1367; 42 U.S.C. § 9613(b)).] The Complaint alleges the following claims: a CERCLA cost recovery claim pursuant to 42 U.S.C. § 9607(a) ("Count I"); a HERL contribution/indemnity claim pursuant to Haw. Rev. Stat. § 128D-18(d) ("Count II"); a claim for a declaratory judgment regarding liability for future response costs ("Count III"); breach of contract ("Count IV"); and a CERCLA and HERL indemnity claim ("Count V").
Wond Family is the fee owner of the real property at issue in this case - Tax Map Key ("TMK") No. (1)1-5-021:024 ("the Property").3 [Concise Statement of Facts in Supp. of Continental's Count IV Motion ("Continental's Count IV CSOF"), filed 10/6/17 (dkt. no. 61), at ¶ 1; Separate & Concise Counter-Statement of Material Facts in Opp. to Continental's Count IV Motion ("Wond Family's Responsive Count IV CSOF"), filed 11/27/17 (dkt. no. 77), at § I (admitting Continental's ¶ 1).] It was previously owned by individual Wond family members, but they conveyed their interests to the Wond Family Kapalama Trust ("Wond Trust") in the 1960s. [Wond Count IV Decl.,4 Exhs. 1-4 (certified copies of Indentures).] In 2011, the Wond Trust conveyed its interest in the Property to Plaintiff. [Wond Count IV Decl. at ¶ 8, Exh. 5 (Limited Warranty Deed).]
Monmouth, Inc. ("Monmouth") was the lessee in a lease on the Property from November 1, 1957 to October 31, 2012 ("the Lease"). Clarke Investment Corporation ("Clarke Investment") acquired Monmouth's interest in the Lease by mesne assignment. [Wond Family's Count IV CSOF at ¶¶ 2-3; Continental's Opp. to Wond Family's Count IV CSOF ("Continental's Responsive Count IV CSOF"), filed 11/27/17 (dkt. no. 79), at § I (admitting Wond Family's ¶¶ 2-3).]
Clarke Investment, as lessor, and Melim Service & Supply Co., Ltd., as lessee, entered into an Indenture of Sublease of the Property ("the Sublease") on February 12, 1959. , Melim Tire & Rubber Co., Ltd. executed an Assignment of Leases ("Assignment") on September 24, 1968,5 assigning the Sublease to The General Tire and Rubber Company ("General Tire").6 The Assignment was filed in the LandCourt on March 17, 1969. [Bail Count IV Decl., Exh. B.] The parties refer to the filing date as the date of the Assignment. [Continental's Count IV CSOF at ¶ 4; Wond Family's Responsive Count IV CSOF at § I (admitting Continental's ¶ 4).]
In the Assignment, "General Tire and its successors and assigns covenanted that they would 'observe and perform all of the covenants and agreements in said documents contained and on the part of the Lessee to be paid, observed and performed . . . .'" [Wond Family's Count IV CSOF at ¶ 7; Continental's Responsive Count IV CSOF at § I (admitting Wond Family's ¶ 7).] In 1984, General Tire - which at the was named GenCorp, Inc. - assigned its interest in the Sublease to General Tire, Inc.7 Kapalama Associates LLC ("Kapalama Associates")8 purchased Clarke Investment's interest in the Lease on November 8, 2000 in bankruptcy proceedings, and KapalamaAssociates transferred all of its assets to Wond Family in 2012. The Lease and the Sublease expired on October 31, 2012. [Wond Family's Count IV CSOF at ¶¶ 8-11; Continental Tire's Responsive Count IV CSOF at § I (admitting Wond Family's ¶¶ 8-11).] Continental Tire vacated the Property when the Sublease expired. [Continental's Count IV CSOF at ¶ 6; Wond Family's Responsive Count IV CSOF at ¶ 6 ().] Continental Tire does not currently own or operate a facility on the Property. [Continental's Count IV CSOF at ¶ 12; Wond Family's Responsive Count IV CSOF at § I (admitting Continental's ¶ 12).] During the term of the Lease and Sublease, Wond Family, the individual Wond family members, the Wond Family Trust, and Kapalama Associates did not have access to the Property. [Pltf.'s Separate & Concise Statement of Material Facts in Supp. of Wond Family's Counts I-III ("Wond Family's Counts I-III CSOF"), filed 10/6/17 (dkt. no. 65), Decl. of Michael M. Wond, Jr. ("Wond Counts I-III Decl.") at ¶ 26.]
Wond Family states that, on or before 1955, Melim was operating a tire recapping and automotive service business on the Adjoining Property. [Mem. in Supp. of Wond Family's Count IV Motion at 5 .9] According to Wond Family, sometime after Melim entered into the Sublease, it began using both the Property and the Adjoining Property to operate its business. [Wond Count IV Decl. at ¶ 24.] However, Continental Tire presents evidence that the Property was used primarily as a parking lot for the tire business - which was operated on the Adjoining Property - until approximately 1992 or early 1993. [Concise Statement of Facts in Supp. of Continental's Counts I-III Motion ("Continental's Counts I-III CSOF"), filed 10/6/17 (dkt. no. 57), Decl. of Lindsay Friedman ("Friedman Decl.") at ¶ 3.10]
In 1968, Melim sold its business to General Tire, and the business was renamed "Melim General Tire Service." [Ford Report, App'x D (various newspaper advertisements and articles) at 1-4.] From 1968 to 1993, General Tire and its successors used both properties to operate a tire sales and recapping/automotive services business.11 Either Continental Tire or its predecessorshad possession and control of the Property from September 24, 1968 until at least October 31, 2012. [Wond Count IV Decl. at ¶¶ 25, 27.]
Melim used a building, which it constructed, on the Adjoining Property to operate its business ("Service Station A").12 Service Station A "was expanded such that part of its footprint was on the Property," but it was demolished...
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