Beazer v. Agrico ( 1998 )

Filed: August 24, 1998
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 96-1148
(CA-89-2851-2-8)
Beazer Materials and Services, etc., et al,
Defendant & Third Party Plaintiff - Appellants,
versus
Acrico Chemical Co., et al,
Defendant & Third Party Plaintiff - Appellees.
O R D E R
The court amends its opinion filed January 21, 1998, as
follows:
On the cover sheet, section 1 -- the status is changed from
“UNPUBLISHED” to “PUBLISHED.”
On page 2, section 4, line 1 -- the status line is changed to
begin “Affirmed by published opinion. . . .”
On page 2, section 6 -- the reference to use of unpublished
opinions as precedent is deleted.
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
H. GEORGE DENT, JR.; ASHLEY
REALTY COMPANY, INCORPORATED, a
South Carolina Corporation;
SOUTHERN DREDGING COMPANY,
INCORPORATED, a South Carolina
Corporation,
Plaintiffs,
v.
BEAZER MATERIALS AND SERVICES,
INCORPORATED; BEAZER EAST,
INCORPORATED,
Defendant & Third Party
Plaintiff-Appellants,
v.
AGRICO CHEMICAL COMPANY; No. 96-1148
CONTINENTAL OIL COMPANY;
AMERICAN AGRICULTURAL CHEMICAL
COMPANY; FOS-KEM LIQUIDATION
CORPORATION,
Defendant & Third Party
Plaintiff-Appellees,
and
CELANESE POLYMER SPECIALTIES
COMPANY; HANSON PLC; HANSON
INDUSTRIES,
Defendants,
v.
BRASWELL SHIPYARDS, INCORPORATED,
Third Party Defendant.
Appeal from the United States District Court
for the District of South Carolina, at Charleston.
Solomon Blatt, Jr., Senior District Judge.
(CA-89-2851-2-8)
Argued: April 7, 1997
Decided: January 21, 1998
Before WIDENER, Circuit Judge, PHILLIPS, Senior Circuit Judge,
and DOUMAR, Senior United States District Judge for the
Eastern District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Senior Judge Phillips wrote the
opinion, in which Judge Widener and Senior Judge Doumar joined.
_________________________________________________________________
COUNSEL
ARGUED: Robert E. Stepp, GLENN, MURPHY, GRAY & STEPP,
L.L.P., Columbia, South Carolina, for Appellants. Mark Richard
Zehler, Legal Department, CONOCO, INC., Houston, Texas; Samuel
J. Morley, HOLLAND & KNIGHT, Tallahassee, Florida, for Appel-
lees. ON BRIEF: Robert C. Rhodes, GLENN, MURPHY, GRAY &
STEPP, L.L.P., Columbia, South Carolina; Elizabeth H. Warner,
BUIST, MOORE, SMYTHE & MCGEE, P.A., Charleston, South
Carolina, for Appellants. Lawrence N. Curtin, HOLLAND &
KNIGHT, Tallahassee, Florida; Maureen E. Mahoney, Michael P.
Vandenbergh, John C. Marchese, LATHAM & WATKINS, Washing-
ton, D.C.; Michael A. Scardato, MCNAIR LAW FIRM, P.A.,
Charleston, South Carolina, for Appellees.
_________________________________________________________________
2
OPINION
PHILLIPS, Senior Circuit Judge:
This is an appeal by Beazer Materials and Services, Incorporated
and Beazer East, Incorporated (Beazer) from a district court judgment
finding Beazer liable in a private action brought under the Compre-
hensive Environmental Response, Compensation, and Liability Act of
1980 (CERCLA), 42 U.S.C. §§ 9601, et seq ., for all past and future
response costs resulting from the environmental pollution of a CER-
CLA "Superfund" site, and holding Beazer liable under state law for
contractual and equitable indemnification of two co-defendants. We
affirm.
I.
The Superfund site at issue is made up of two adjoining tracts of
land on or near the Ashley River in Charleston, South Carolina. A
45-acre tract (the Koppers property) was owned from 1930 to 1977
by the Koppers Co., Inc., of which Beazer is the corporate successor.
During that period, Koppers operated a large wood-treating plant on
the property. The other tract of 57 acres (the Dent property) was
owned from 1921 to 1963 by the American Agricultural Chemical
Co. of Connecticut, from 1963 to 1972 by Continental Oil Co. (Con-
oco), and from 1972 to 1978, by Agrico Chemical Co. (Agrico). Until
mid-1972, the successive owners of the Dent property operated a fer-
tilizer manufacturing plant at the site. Following two intervening
ownerships, this tract was bought in two parcels by George Dent in
1983 and 1986, and was thereafter owned and used for various pur-
poses by two Dent enterprises, Southern Dredging Co., Inc. and Ash-
ley Realty Co., Inc. (collectively, Dent). From 1963 to 1968, Beazer
leased from Conoco (which assumed a prior lease) a 4-acre parcel of
the Dent property that adjoined the Koppers property, for use in con-
nection with its wood-treating operation. The lease contained an
indemnification clause obligating the lessee to hold the lessor harm-
less from all claims arising out of the leased property's use.
The events giving rise to this litigation began in 1985, during
Dent's ownership of the 57-acre tract. At that time, dredging of a
barge canal on the Dent property released wood-treating chemicals
3
into the Ashley River. The resulting fish-kills and other consequences
of pollution attracted national publicity and led to both state and fed-
eral intervention under relevant environmental protection laws.
The state and federal environmental investigations established the
critical facts--not challenged in this litigation--that for nearly 50
years Koppers' environmentally unsound wood-treatment practices
had caused an estimated five to seven million gallons of creosote to
be released into the environment, including the soil of its own prop-
erty and, by subsurface migration, that of the adjoining Dent property,
and from there into the Ashley River. Specifically offending chemical
constituents ("constituents of concern") under relevant provisions of
CERCLA and other federal environmental law were determined to be
those of creosote, Koppers' principal wood-treating agent. It is undis-
puted that during the time at issue, these chemicals were only released
into the area at issue by Koppers/Beazer's wood-treating operation.
On December 5, 1989, with administrative remediation processes
of the federal Environmental Protection Agency (EPA) underway as
a result of the investigative findings, Dent commenced this action
against, inter alia, Beazer, Conoco, and Agrico under relevant provi-
sions of CERCLA and state law. Specifically, Dent sought recovery
under CERCLA § 107(a), 42 U.S.C. § 9607(a), of any statutory
response costs incurred or to be incurred as a result of the release of
hazardous substances on its property, and under CERCLA
§ 113(g)(2), 42 U.S.C. § 9613(g)(2), a declaratory judgment establish-
ing the defendants' liability in any action seeking recovery of further
response costs or damages related to such a release. Additionally,
Dent sought recovery of compensatory and punitive damages and
injunctive relief on a variety of pendent state-law claims: fraud, negli-
gence, etc.
An extended four-year period of pre-trial pleading, discovery and
motion practice followed. Its full details need not be recited at this
point. It suffices for immediate purposes to note that when the case
finally came on for trial on September 22, 1993, the following claims,
cross-claims and counterclaims had been pleaded and remained for
trial: (1) Dent's claims against Beazer under CERCLA § 107(a) for
statutory response costs, under § 113(f)(1) for contribution, and under
§ 113(g)(2) for declaratory judgment as to future costs, and under
4
state law for damages and injunctive relief, and Beazer's generally
corresponding CERCLA counterclaims against Dent; 1 (2) Conoco's
cross-claims against Beazer, under CERCLA § 113(f)(1) for contribu-
tion, under § 113(g)(2) for declaratory judgment as to future response
costs, and under state law for contractual or equitable indemnification
of its litigation costs in defending against Dent's claims respecting the
4-acre parcel leased to Beazer, and Beazer's generally corresponding
CERCLA counterclaims against Conoco; (3) Agrico's cross-claims
against Beazer under CERCLA § 113(f)(1) for contribution, under
§ 113(g)(2) for declaratory judgment and under state law for equitable
indemnification of its litigation costs, and Beazer's generally corre-
sponding CERCLA counterclaims against Agrico.
Just before the case went to trial, the district court ruled as a matter
of law that the indemnification provision in the Conoco/Beazer lease
bound Beazer to indemnify Conoco for all litigation costs incurred by
Conoco in defending against any claim arising out of Beazer's use of
the leased 4-acre parcel.
On Conoco's motion, the case was bifurcated for trial. Tried first
to a jury were the factual issues underlying the Conoco and Agrico
indemnification claims against Beazer. On Conoco's contractual
indemnification claim, the jury found that Dent's claim against Con-
oco did arise out of Beazer's use of the leased parcel. On Agrico's
equitable indemnification claim, the jury found that the Dent claim
against Agrico was based upon Beazer's creosote contamination of
the Dent property. Based upon these jury findings, the district court
later entered judgment for both Conoco and Agrico on their respective
indemnification claims for litigation costs.
Following return of the jury verdict on the indemnification claim
issues, Dent and Beazer settled and dismissed all the CERCLA and
state-law claims and counterclaims between those two parties. This
left for resolution only the CERCLA cross-claims and counterclaims
between Conoco and Beazer and between Agrico and Beazer for
response costs under § 107(a), contribution under § 133(f)(1), and
declaratory judgment under § 113(g)(2).
_________________________________________________________________
1 Beazer, Conoco, and Agrico had in the interval settled and voluntarily
dismissed the several claims and counterclaims between those parties.
5
The CERCLA cross-claims and counterclaims were tried over a
four-day period from October 18 through October 21, 1993. On Octo-
ber 18, the day the trial commenced, Beazer filed a motion for leave
to amend its CERCLA claims against Conoco and Agrico to allege,
as newly discovered evidence, the presence on the Dent property of
lead and other "non-wood treating constituents" in addition to the
wood-treating creosote constituents that until then had been the sole
basis of its cross-claims for response costs, contribution and declara-
tory judgment. Though resisting Beazer's contention that the prof-
fered evidence was newly discovered, Conoco and Agrico consented,
in order to avoid a continuance on the eve of trial, to allowing the
proffered amendment. The district court did so, while imposing mon-
etary sanctions, and the case proceeded to trial on the amended
Beazer counterclaim.
The district court heard the case as so structured on voluminous
documentary and testimonial evidence, including the recorded testi-
mony and documentary evidence admitted in the jury trial. Following
a hearing on several post-trial motions, the court took the case under
submission on December 15, 1993.
Almost a year later, on October 12, 1994, with decision still pend-
ing, Beazer moved to reopen the case to allow proof that Conoco and
Agrico were liable, by reason of their release of fertilizer constituents,
for a larger share of response costs related to the Dent property than
was indicated by the evidence adduced at trial. The motion was
denied as untimely and prejudicial on January 9, 1995. On Janu-
ary 23, 1995, the court denied a similar request for reopening pursu-
ant to Rule 103(a)(2), Fed. R. Evid., on the grounds that the proffered
evidence had already been considered. On January 25, 1995, Beazer
moved for reconsideration of the two previous orders. Following a
hearing on this motion on February 14, 1995, it was denied. When
Beazer persisted with suggestions for reopening, another hearing was
held on March 2, 1995 to consider the matter, following which the
district court proposed conditions upon which the record might be
reopened for the purposes sought by Beazer. When Beazer indicated
unwillingness to abide by the proposed conditions, the district court
on May 2, 1995, denied Beazer's final motion for reconsideration of
the previous orders refusing to reopen. Beazer moved again on
November 27, 1995, for leave to supplement the record, and this
6
motion was denied on December 28, 1995, "for the reasons . . . previ-
ously stated."
In a comprehensive order filed on December 28, 1995, the district
court made extensive findings of fact and conclusions of law dispos-
ing of the various claims pending for decision. Among the findings
of fact were the following critical ones which we summarize:
(1) Beazer (Koppers) was the sole user of wood treating chemicals
on the Superfund site, and had during the 50 years of its operation at
the site released between 5 and 7 million gallons of these chemicals
which consisted principally of creosote, a dark, viscous liquid that
contains several polynuclear aromatic hydrocarbons; (2) as a result of
their subsurface migration, these chemicals were the cause of the
Dent property contamination and were the reason that remediation
efforts at the site were required; (3) Beazer knew its waste handling
practices were unsound, but derived $16 million in economic benefit
by consciously refusing to upgrade its waste handling system; (4) any
harms caused by wood treating chemicals and fertilizer constituents
could be separately identified because the substances have different
chemical characteristics and because different types of actions are
typically used to remediate them; (5) the relative toxicity, synergistic
capacity, and migratory potential of the wood treating chemicals and
the fertilizer constituents are quite distinct; (6) the only hazardous
substance for which there was credible evidence suggesting that
releases might have come from either Conoco or Agrico is lead;
(7) no credible evidence adduced by Beazer or otherwise suggested
that the presence of lead at the site would require remediation and
thus affect the cost of past, present, or future remediation efforts;
(8) Beazer had notice that lead and other fertilizer constituents were
present on the Dent property since at least 1990, but had deliberately
chosen not to investigate or initially to pursue its counterclaims based
upon their known presence and had first sought in this action to plead
that their presence would require remediation only on the day before
scheduled trial of the CERCLA claims on October 17, 1993.
On the basis of these and other findings and related conclusions of
law, the court entered judgment on January 3, 1996 in favor of Con-
oco and Agrico and against Beazer on all the CERCLA and state-law
claims pending before the court. See Dent v. Beazer Materials &
Servs., Inc., No. 2:89-2851-8 (D.S.C. Jan. 3, 1996).
7
On Beazer's counterclaim against Conoco and Agrico for past
response costs, the court concluded that though Agrico and Conoco
were potentially liable persons under § 107(a)(2) by virtue of their
release of fertilizer chemical constituents on the Dent property, they
had avoided imposition of joint and several liability by sufficiently
proving that the fertilizer constituents had not and would not require
CERCLA remediation. On this basis, the court concluded that Beazer
was not entitled to recover any § 107 response costs from Conoco or
Agrico but was itself solely liable for all such costs.
Alternatively, the court held that even if Conoco and Agrico were
found to be jointly and severally liable for response costs by virtue
of an "indivisible" contamination of the site, they should yet be equi-
tably entitled to full contribution for those costs by Beazer under
§ 113(f)(1). On this basis, the court found in favor of Conoco and
Agrico on their cross-claims and against Beazer on its counterclaim
for contribution.
On the parties' cross-claims for declaratory judgment under
§ 113(g)(2), the court further declared Beazer liable, as the party
solely responsible for site contamination, for all future response costs
at the site. In so holding, the court specifically rejected Beazer's con-
tention that allocation of liability for future remediation costs should
await final EPA findings on the hazardous substances requiring
remediation.
On the state-law indemnification cross-claims, the court entered
judgment in favor of both Conoco and Agrico on the basis of the
jury's findings that the litigation costs incurred by both parties in
defending against Dent's claims were caused by Beazer's conduct.
This appeal followed. Beazer challenges on numerous grounds:
(1) the district court's allocation to Beazer of 100% liability for past
and future response costs; (2) the district court's discretionary refusal
to grant Beazer's several post-submission motions to reopen the
record to consider newly discovered evidence respecting the release
of fertilizer constituents by Conoco and Agrico; (3) the district
court's award of contractual indemnification to Conoco on its state-
law claim; and (4) the court's award of equitable indemnification to
Agrico on its state-law claim. We take these in order.
8
II.
We first consider Beazer's several challenges to that portion of the
judgment which rejected its § 107 claims against Conoco and Agrico
for past response costs.
Under CERCLA § 107(a), 42 U.S.C. § 9607(a), various persons
connected in different ways with the release or threatened release of
hazardous substances that cause "response costs" to be incurred by
other governmental and natural persons are made"liable" to those
other persons for the costs incurred. Subject only to four "innocent
party" exceptions provided in § 107(b), this statutory liability is
"strict"--imposed without regard to culpability or causation. See
United States v. Monsanto, 858 F.2d 160, 167 (4th Cir. 1988), cert.
denied, 490 U.S. 1106 (1989). Among the persons made liable under
§ 107(a) are the owners of property at the time of the "disposal" upon
it of any hazardous substance. See 42 U.S.C. § 9607(a)(2). Where
multiple persons are liable under § 107--either as past or present
owners or otherwise--for response costs incurred with respect to a
particular site, their liability is joint and several for the entire costs
incurred unless a liable person can establish that the environmental
harms reflected in the total costs incurred were fairly divisible
between the liable persons. Monsanto, 858 F.2d at 171-72. In such
cases, several liability may be apportioned between multiple liable
persons by applying, in accordance with congressional intent, federal
common law apportionment principles. See id. (drawing apportion-
ment principles from § 433A of the Restatement (Second) of Torts).
Conceding, as it must on the undisputed facts, that it is a liable per-
son by virtue of its long-term creosote disposal practices, Beazer
sought by its § 107(a) counterclaims against Conoco and Agrico to
impose upon those parties joint and several liability with Beazer for
all of the response costs incurred in consequence of hazardous sub-
stance disposals on both properties comprising the Superfund site.
Beazer's trial position, as finally alleged in its eve-of-trial amended
counterclaim, was that Conoco and Agrico were liable persons not
only with respect to the release of hazardous substances from their
fertilizer operations on the Dent property, but also with respect to the
9
hazardous wood-treating substances released on the Koppers property
that had found its way by subsurface migration onto the Dent property.2
The district court rejected Beazer's contention that Conoco and
Agrico should be held jointly and severally liable with it for all past
response costs incurred as a result of the release of hazardous sub-
stances on both properties comprising the Superfund site. The court
first assumed that Conoco and Agrico were potentially liable persons
by virtue of the release of fertilizer constituents on the Dent property
during their respective periods of ownership of that property. But,
applying relevant divisibility and apportionment principles, see
Monsanto, 858 F.2d at 171, it then held that those parties should not
be held jointly liable with Beazer for all response costs incurred in
remediation of the site.
First, the court found that any harms to the site caused by wood-
treating chemicals were sufficiently distinguishable by scientific test-
ing procedures from any caused by fertilizer constituents to permit
reasonable apportionment of related response costs and other damages
between the persons respectively responsible for release of the two
types. (JA 236-38 (order).) It then held that because no harm caused
by wood-treating chemicals could be fairly attributed to Conoco and
Agrico, they could only be severally liable, under property apportion-
ment principles, for any harm and resulting response costs caused by
fertilizer constituents for whose release they were responsible. (Id. at
235.) And, it then found that the only hazardous fertilizer substance
_________________________________________________________________
2 Beazer's specific legal theory for holding Conoco and Agrico liable
as former owners of the Dent property for response costs related to
Beazer's release of wood-treating chemicals on the adjoining Koppers
property is not clear. In its brief, Beazer concedes at one point that sub-
surface migration of those wood-treating "organic" substances onto the
Dent property would not constitute its "disposal" on that property.
(Appellant's Br. 39 n.11.) That being conceded, Conoco and Agrico
could not be liable persons as to those substances under § 107(a)(2),
because they were not "person[s] who at the time of disposal . . . owned
. . . any facility at which such hazardous substances were disposed of."
42 U.S.C. § 9607(a)(2) (emphasis added). The precise theory now being
urged by Beazer (and it has seemed to shift over time) is in any event
irrelevant to the basis of the district court's disposition of the § 107(a)
claim and to our review of that disposition.
10
identified on the site was lead, and that it was not present in sufficient
quantities to require any remediation. (Id. at 235-36.) On the basis of
these findings, the district court concluded that under relevant appor-
tionment principles, all liability for response costs incurred at the site
should be apportioned to Beazer and none to Conoco or Agrico. (Id.)
The court accordingly entered judgment for Conoco and Agrico on
Beazer's 107(a) counterclaims to recover response costs from those
parties as persons jointly and severally liable with it.
Beazer challenges the rejection of its § 107(a) claim on several
grounds. None has merit.3
As to the critical findings of fact underlying the rejection, each is
either conceded by Beazer or is amply supported by the evidence and
is not, therefore, clearly erroneous. Specifically, Beazer has conceded,
as it must, that harms caused by wood-treating chemicals and those
caused by fertilizer constituents were sufficiently divisible to permit
apportionment of liability as between them. (See Appellant's Br. at
31, 36.) Its contention of error respecting the court's apportionment
goes only to the failure to hold Conoco and Agrico liable for harm
caused by the wood-treating constituents which it rightly, but irrele-
vantly, points out was indivisible. (See id.) The court did not err in
this respect. It correctly ruled as a matter of law on the undisputed
facts before it that no harm caused by wood-treating constituents
could fairly be attributed to Conoco and Agrico. No wood-treating
constituents were released by those parties during their prior owner-
ships of the Dent property and they could not be held to have released
those constituents simply because, unbeknownst to them and beyond
any means of their control, the substances were leaching onto their
property from their release point on the Koppers property by subsur-
face migration. Strict liability could not, therefore, be imposed upon
them for the release of those constituents under any of the relevant
"liable person" provisions of § 107(a)(1)-(4). See United States v.
Rohm & Haas Co., 2 F.3d 1265, 1280 (3d Cir. 1993) (recognizing
_________________________________________________________________
3 Several do not warrant discussion: that Conoco and Agrico, unlike
Beazer, had refused cooperation with the EPA; that the EPA had indi-
cated its belief that Conoco and Agrico should be liable by submitting
to them information requests under § 104(e); and that § 113(f)(2) entitled
Beazer to contribution as a party who had settled with the EPA.
11
that upon proof that a hazardous substance found on a site could not
be "fairly attributable" to a party sued under§ 107(a), that party's
properly "apportioned share would be zero"); United States v. Alcan
Aluminum Corp., 964 F.2d 252, 270 (3d Cir. 1992) (holding that
potentially liable party could avoid all liability by proving its released
hazardous substances did not contribute to response costs); cf. Nurad,
Inc. v. Williams E. Hooper & Sons Co., 966 F.2d 837, 845 (4th Cir.)
(former property owner liable for leakage of hazardous substance into
soil of own property notwithstanding participation merely passive),
cert. denied, 506 U.S. 940 (1992).
Neither did the district court err in finding that the fertilizer constit-
uents, for whose disposal Conoco and Agrico were potentially liable
persons, had caused no harm requiring remediation. The only
fertilizer-related hazardous substance identified in the evidence at trial
was lead. There was credible evidence that it was in quantities too
low to require CERCLA remediation; indeed, there was evidence that
efforts to remove the quantities of lead involved would be environ-
mentally counter-productive. (JA 579-81.)
Accordingly, we affirm the district court's rejection of Beazer's
§ 107(a) claims against Conoco and Agrico for incurred response costs.4
III.
Based upon its determination that Koppers/Beazer's releases of
wood-treating chemical constituents "were the only cause of the harm
inflicted on the environment at this site," (JA 235 (order)), the district
court also held, on Conoco's and Agrico's § 113(g)(2) claim for
declaratory judgment, that Beazer was liable for 100% of all future
response costs incurred at the site. (Id. 238.)
_________________________________________________________________
4 The district court determined in the alternative that even if Conoco
and Agrico were found jointly and severally liable with Beazer for all
response costs, Beazer should yet be liable for all such costs based upon
consideration of relevant equitable factors on the§ 113(f)(1) contribution
claims of Conoco and Agrico. (JA 242-47.) In view of our affirmance of
the judgment absolving those parties of any liability on Beazer's § 107(a)
response costs claims, we need not address this alternative basis for the
judgment in their favor.
12
Beazer challenges this imposition of liability for future response
costs on two interrelated contentions: (1) that because administrative
investigation to determine the full extent of required remediation at
the site was still ongoing at conclusion of the CERCLA trial, the dis-
trict court could not properly allocate liability between the parties on
the basis of the evidence adduced at trial; and (2) the court then
abused its discretion by denying Beazer's repeated post-trial motions
to reopen the record to permit introduction of newly discovered evi-
dence respecting the release of fertilizer constituents on the Dent
property. We find no merit in either contention.
First, the court did not err in entering declaratory judgment as to
future response costs on the basis of evidence adduced before comple-
tion of administrative proceedings.
Section 113(g)(2) provides that:
In any . . . action described in this subsection, the court shall
enter a declaratory judgment on liability for response costs
or damages that will be binding on any subsequent action or
actions to recover further response costs on damages. A sub-
sequent action or actions under Section [107] . . . for further
response costs . . . may be maintained at any time during the
response action . . . .
42 U.S.C. § 9613(g)(2) (emphasis added).
As this statutory language makes clear, under § 113(g)(2), "[t]he
entry of declaratory judgment as to liability is mandatory." Kelley v.
E.I. DuPont de Nemours & Co., 17 F.3d 836, 844 (6th Cir. 1994).
Compare 42 U.S.C. § 9613(g)(1) (an action for natural resource dam-
ages cannot be commenced "before [administrative] selection of the
remedial action" where there is an ongoing "remedial investigation
and feasibility study"), with id. § 9613(g)(2) (actions to recover
response costs can be brought without regard to status of EPA site
investigation).
Even if multiple response costs actions exist or might exist, the
court in the first action to reach decision is required to enter judgment
13
as to liability for the site. The purpose of § 113(g)(2) is, in fact, to
require that the court's judgment in the first action have a preclusive
effect as to liability on all successive actions. See United States v.
USX Corp., 68 F.3d 811, 819 n.17 (3d Cir. 1995) ("Essentially,
§ 113(g)(2) mandates collateral estoppel effect to a liability determi-
nation.").
The language of § 113(g)(2) is not internally inconsistent on the
question of when liability should be determined. While § 113(g)(2)
permits actions for "further response costs," such as to contest the
amount of response costs, it does not permit a successive determina-
tion of liability. Id. If each action required a new liability determina-
tion, CERCLA's declaratory judgment provision would be
meaningless. Section 113(g)(2) specifically provides for a "declara-
tory judgment on liability for response costs or damages that will be
binding on any subsequent action." As the Sixth Circuit said in
Kelley, "[t]he fact that future costs are somewhat speculative is ``no
bar to a present declaration of liability.'" Kelley, 17 F.3d at 844 (quot-
ing United States v. Fairchild Indus., Inc., 766 F. Supp. 405, 415 (D.
Md. 1991)). Permitting prompt declaratory judgments encourages
prompt remedial action. See O'Neil v. Picillo , 682 F. Supp. 706, 730
(D.R.I. 1988), aff'd, 883 F.2d 176 (1st Cir. 1989), cert. denied, 493
U.S. 1071 (1990).5
Second, the court did not abuse its discretion in refusing to reopen
the record after trial on Beazer's several motions. A brief summary
of relevant procedural history shows why.
As the district court correctly noted (JA 257), Beazer was on notice
of the presence of lead on the Dent property as far back as early 1990.
Nevertheless, it did not assert lead contamination as a basis for recov-
ery of response costs by cross-claims against Conoco and Agrico as
_________________________________________________________________
5 Even if the district court were not bound to enter judgment immedi-
ately, it did not abuse its discretion in doing so here. At the time trial of
the CERCLA claims commenced, the case had been pending for four
years with no request for continuance or stay by Beazer. And, indicating
its assumption at the time, Beazer had also made claims for declaratory
judgment, presumably on the evidence to be adduced at a trial which it
did not timely move either to continue or to stay.
14
co-defendants at any time before those parties in September, 1992
filed § 107(a) and § 113 cross-claims against Beazer. And, it did not
even then assert it as a counterclaim (though it was a compulsory one)
against those parties. Instead, deliberately declining at that time to
assert any claims against those co-defendants in this action, Beazer
first sought to raise CERCLA claims against them and other parties
in a separate CERCLA action, Beazer East, Inc. v. United States
Navy, 2-93-1677-8 (D.S.C. July 9, 1993), in July, 1993, three and a
half years after this action was commenced by Dent and ten months
after Conoco and Agrico had served § 107(a) and § 113 cross-claims
against Beazer. Beazer then unsuccessfully sought to have its sepa-
rately filed CERCLA action consolidated with this action. Following
denial of Beazer's consolidation motion, Conoco and Agrico agreed
to allow Beazer belatedly to assert compulsory CERCLA counter-
claims against them in this action. Beazer did so on August 27, 1993,
asserting CERCLA claims for response costs under § 107(a) and for
contribution and declaratory judgment under § 113. These claims, as
then pleaded, did not mention lead as a cause of response costs, but
claimed joint and several liability and sought contribution only on the
basis of contamination of the site by wood-treating constituents. It
was only on Sunday, October 17, 1993, the day before the CERCLA
trial was scheduled to start, that Beazer for the first time asserted in
pleadings amended (by consent of Conoco and Agrico in order to
avoid delay) that Conoco and Agrico were liable to Beazer for
response costs caused by lead contamination of the site. As indicated,
Beazer then went to trial on its cross-claims as pleaded, and did not
request any continuance or stay of trial to permit further discovery or
investigation by it, or to permit further investigative procedures by the
government agencies. But, as also indicated, once the case had been
submitted for decision, Beazer then made repeated efforts to have the
case reopened for consideration of allegedly newly-discovered evi-
dence, both as to the quantities of lead on the site and eventually as
to the presence of other "newly discovered" fertilizer constituents.
The district court did not abuse its discretion in refusing to reopen
in response to these efforts. Beginning with its eve-of-trial motion to
amend to allege lead contamination for the first time in four years of
pre-trial proceedings, Beazer's efforts to expand the record and alter
the dimensions of the case as then established invited growing incre-
dulity, and occasionally rebuke, by the district court. The last-minute
15
motion to amend on trial's eve was based on Beazer's assertion that
it "learned of the presence of non-wood treating constituents on the
Dent property" only after filing its August 27, 1993, counterclaim
which did not allege the presence of any fertilizer constituents. Fol-
lowing a hearing on the motion, the district court found the assertion
of new discovery untrue and sanctionable. (JA 257-58.) Specifically,
the court found that Beazer had known of lead's presence on the site
as far back as early 1990. (Id. at 257.) Nevertheless, the court, with
the consent of Conoco and Agrico, permitted the amendment to intro-
duce this new and potentially important issue regarding the joint lia-
bility of Conoco and Agrico with Beazer for site contamination.
Once in trial, testimonial and documentary evidence was presented
on the question whether the presence of lead and other fertilizer con-
stituents would require site remediation. Notwithstanding the abun-
dant opportunity had by Beazer to address and counter unfavorable
evidence on this issue during trial, it continued in the post-trial period
to seek relitigation of the issue on a re-opened record. Its theories for
re-opening continued to shift over the period.
On October 12, 1994, in its first post-trial motion to re-open the
record, Beazer claimed to have "newly discovered evidence" of "addi-
tional" potential fertilizer constituents other than lead (e.g., fluorine),
even though the presence of these fluorine constituents was already
known. On January 13, 1995, Beazer filed an "offer of proof" and
requested a hearing because a January 11, 1995 EPA letter had identi-
fied lead and arsenic at the site, though not the "additional" (fluorine)
fertilizer constituents that were the basis for the earlier motion. After
the court denied Beazer's motion to reopen, Beazer then filed a
motion to reconsider on January 25, 1995. That motion relied upon a
January 1995 EPA fact sheet relating to lead and arsenic but again not
any "additional" fertilizer constituents. Despite the fact that the Janu-
ary 25, 1995 motion to reconsider was untimely, the court conducted
three hearings on the matter during which Beazer's position continued
to shift. At one point in the proceedings, Beazer asserted that if the
record were reopened it would not attempt to introduce "any new evi-
dence about lead," but declined to identify which hazardous substance
or data it would rely upon in the proceedings or that it would in fact
rely upon any new evidence at all. After the court denied this motion
to reconsider on May 2, 1995, Beazer on November 27, 1995 filed yet
16
another motion to supplement the record with an EPA finding regard-
ing lead and arsenic (but not the additional fertilizer constituents).
That motion was denied in the court's final order.
When this conduct of Beazer's in the trial and post-trial stages of
this litigation is considered in conjunction with its litigation conduct
in the protracted pre-trial stage, it is abundantly clear that the court
did not abuse its discretion in declining to reopen the case post-trial.
IV.
Challenging the entry of judgment in favor of Conoco on Conoco's
contractual indemnification claim, Beazer contends that the district
court erred as a matter of law in ruling pre-trial that the indemnifica-
tion provision in the 4-acre lease bound Beazer to indemnify Conoco
for the latter's litigation costs in defending against Dent's CERCLA
claims. The contention is two-fold. First, that because it is undisputed
that Beazer made no use of the leased parcel that involved the dis-
posal of wood-treating constituents, Dent's claim against Conoco for
response costs related to the parcel did not arise out of Beazer's use
of the parcel. Second, that the indemnification provision does not, in
any event, apply to CERCLA claims. We disagree on both points and
find no error in the judgment in favor of Conoco on this claim.
The indemnification provision at issue provides, in critical part,
that "[Beazer] agrees to save [Conoco] harmless from any and every
claim arising out of the use by [Beazer] of the demised premises . . . ."
(JA 222.)
Beazer's contention that this contractual obligation only applies to
claims that involved Beazer's harm-causing use of the leased parcel
misinterprets the obligation. As the district court properly held, the
obligation is not to save Conoco harmless only from meritorious
claims arising from Beazer's use of the parcel but to save Conoco
harmless from "any and every claim arising out of [Beazer's] use."
(JA 219.) That left only the question whether Dent's claim against
Conoco for response costs did in fact arise out of Beazer's use--
whether or not the claim was mistaken (as concededly it was) as to
the use actually made. That very question was submitted to the jury
which found by special verdict that Dent joined Conoco as a party-
17
defendant only because of Beazer's use of the leased parcel. The dis-
trict court did not err in this aspect of its ruling on the indemnification
provisions coverage.
Neither did the court err in interpreting the indemnification provi-
sion to cover the CERCLA claim at issue. Beazer relies on the Third
Circuit's holding in Beazer East, Inc. v. Mead Corp., 34 F.3d 206,
211 (3d Cir. 1994), cert. denied, 514, U.S. 1065 (1995), that whether
a pre-CERCLA indemnification provision was intended to cover
CERCLA claim depends upon whether it is "either specific enough to
include CERCLA liability or general enough to include any and all
environmental liability." The provision at issue here, Beazer contends,
fits neither. We disagree. As the district court held, accepting the
Mead Corp. prescription, the provision here which covers "any and
every claim" could not be more general. It therefore sufficed to cover
the CERCLA claim here at issue. See Joslyn Mfg. Co. v. Koppers Co.,
Inc., 40 F.3d 750, 754-55 (5th Cir. 1994) (so construing indemnity
clause covering "any and all claims . . . arising from . . . the occu-
pancy or use of [the] premises").
The district court did not err in entering judgment for Conoco on
its contractual indemnification claim.
V.
Beazer challenges on two grounds the court's entry of judgment
against it and in favor of Agrico on Agrico's equitable indemnifica-
tion claim. First, Beazer contends that under controlling South Caro-
lina law, equitable indemnification lies only between parties having
a contractual or special relationship that did not exist between Beazer
and Agrico. Second, Beazer contends that equitable indemnity does
not lie in favor of a party that itself is at fault in causing the injury
for which indemnification is sought and that here Agrico was so at
fault. We disagree on both points and find no error in this part of the
court's judgment.
Judgment was entered only for litigation costs incurred by Agrico
in defending against Dent's state-law claims of negligence, fraud, etc.
in failing to apprise Dent of the presence of wood-treating constitu-
18
ents when Dent purchased the property from Agrico.6 Under South
Carolina law, as generally, the right to equitable indemnification for
incurring such costs does not depend upon the existence of any con-
tractual or other special relation between indemnitor and indemnitee.
Entitlement to equitable indemnification arises simply out of the
necessity to defend a claim based upon the wrongful conduct--
contractual or tortious--of a third party. It does not depend on there
having been any contractual or other special relationship between the
wrongdoer and the person forced to defend against the claim. See
Town of Winnsboro v. Wiedeman-Singleton, 414 S.E.2d 118, 121
(S.C. 1992) (holding that "recovery is allowed when as a result of
defendant's breach of contract or tortious activity the plaintiff is
required to either defend itself or bring an action against a third
party"); Stuck v. Pioneer Logging Mach., Inc. , 301 S.E.2d 552, 553
(S.C. 1982) (holding that equitable indemnity lies"where one person
is exposed to liability by the wrongful act of another in which he does
not join").
Here, the jury, answering an interrogatory put to it by agreement
of the parties, found that Agrico was sued by Dent solely as a result
of Beazer's conduct in contaminating the Dent property and not
because of Agrico's conduct vis-a-vis Dent. This fact, rather than any
special relationship between Agrico and Beazer, sufficed to invoke
equitable indemnification principles in Agrico's behalf.
Nor is entitlement to equitable indemnification defeated here by
any fault on Agrico's part in bringing about the injury for which it
sought indemnification from Beazer. Freedom from such contributing
fault is, as Beazer contends, a requirement for equitable indemnifica-
tion. See Stuck, 301 S.E.2d at 553. But, here, given the jury's finding,
Agrico cannot be charged with any fault in causing incurrence of the
litigation costs of defending against Dent's state-law claims which is
the injury for which Agrico sought indemnification.
_________________________________________________________________
6 Because Agrico did not seek, and the district court did not award,
indemnification for Agrico's defense against Dent's CERCLA claims,
Beazer's further contention that indemnification does not lie against a
person who settles a CERCLA claim is irrelevant.
19
The district court did not err, therefore, in giving judgment in favor
of Agrico on its equitable indemnification claim.
VI.
Having found no reversible error among those assigned by Beazer,
we affirm the judgment of the district court.
AFFIRMED
20