the-peniel-group-inc-and-beech-grove-holdings-llc-v-elizabeth-bannon ( 2012 )

FILED
FOR PUBLICATION Jul 30 2012, 9:21 am
CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE
BETTY BENEFIEL:
DONN H. WRAY
NICHOLAS K. GHAL DANIEL P. MCINERNY
Stewart & Irwin, P.C. BRYAN H. BABB
Indianapolis, Indiana ALEX C. INTERMILL
Bose McKinney & Evans LLP
Indianapolis, Indiana
ATTORNEYS FOR APPELLEES
CHARLES DODSON AND
BETH DODSON:
KATHERINE L. SHELBY
MARGARET M. CHRISTENSEN
Bingham Greenebaum Doll LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
THE PENIEL GROUP, INC. and BEECH )
GROVE HOLDINGS, LLC, )
)
Appellants, )
)
vs. ) No. 49A02-1201-PL-42
)
ELIZABETH BANNON, KENNETH G. )
SCHAEFER, LINDA A. SCHAEFER, )
NORMA THINNES, BETTY BENEFIEL, )
JANET BEELER, CHARLES DODSON and _
BETH DODSON, )
)
Appellees. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable David J. Certo, Judge
Cause No. 49F12-0811-PL-53044
July 30, 2012
OPINION – FOR PUBLICATION
DARDEN, Senior Judge
STATEMENT OF THE CASE
The Peniel Group, Inc. (“Peniel”) and Beech Grove Holdings, Inc. (collectively,
“Beech Grove Holdings”) appeal the trial court’s entry of summary judgment in favor of
Betty Benefiel, Kenneth G. and Linda A. Schaefer, Janet Beeler, and Charles and Beth
Dodson (collectively, the “Appellees”).
We affirm.
ISSUE
Whether the trial court properly granted the Appellees’ cross-
motions for summary judgment.
FACTS
Churchman Hill Plaza (the “Site”) is a commercial retail center located in Beech
Grove, Indiana. From approximately 1969 until 1996, a dry cleaning business, owned
and operated by various individuals over that period of time, was one of the tenants at the
Site. In 1981, Churchman Hill Associates obtained title to the Site.
In 1989, the Dodsons formed a partnership with two others called the Four
Corners Group. On June 30, 1989, the partnership purchased the business assets of
2
Speed Queen Fabric Care, the dry cleaning business that operated at the Site, from David
and Janet Beeler. The assets purchased from the Beelers included four coin-operated
self-service dry cleaning machines, which used the chemical tetrachloroethene (“PCE”), a
dry cleaning solvent. The PCE was stored in an above-ground storage tank at the Site.
On two occasions, either Charles Dodson or an employee spilled “a small”
quantity of PCE as they were refilling the machines. (App. 118).1 Concrete basins
underneath the machines contained the spills. Occasionally “[s]mall amounts” of PCE
leaked from the machines into the concrete basins when the rubber seals on the doors
failed. (App. 121). Employees placed used PCE filters in containers before discarding
them in a dumpster located at the Site. The partnership ceased using the dry-cleaning
machines in 1996 or 1997.
On or about March 7, 1997, ATC Associates, Inc. (“ATC”) conducted an
environmental site assessment at the Site. Field samples obtained by ATC in the
immediate vicinity of the dry cleaning business revealed the presence of the chemicals
PCE and trichloroethene (“TCE”) in the groundwater and PCE in the soil. ATC opined
that “the source of contaminants is the on-site dry cleaner” and “likely related to the dry
cleaning process.” (App. 193).
ATC conducted a second assessment of the Site in 2000 and again found levels of
PCE and TCE in the soil and groundwater. ATC presented its site assessment to
Churchman Hill Plaza Associates, the Site’s then-owner, on January 27, 2000. In 2001,
1
Citations to the appendix are to Beech Grove Holdings’s appendix.
3
LNR Churchman Hill Plaza, LLC, by LNR Partners, Inc., formerly known as Lennar
Partners, Inc., purchased the Site.
In June of 2005, Bryan Phillips, as President of Lassiter Development Corporation
(“Lassiter”) entered into an agreement to purchase the Site from LNR Churchman Hill
Plaza, LLC. As part of the sale, Lassiter received copies of the prior environmental
assessments conducted at the Site. In September of 2005, Lassiter assigned the
agreement for sale to Beech Grove Holdings, Inc., of which Phillips is a member. Peniel,
which Phillips had started in 1999 as a real estate development and property management
company, managed the Site on behalf of Beech Grove Holdings, Inc.
In 2005, Peniel retained American Environmental Corporation (“AEC”) to
conduct a third assessment of the Site. The assessment revealed levels of PCE and TCE
above default closure levels2 established by the Indiana Department of Environmental
Management (“IDEM”) under its Risk Integrated System of Closure (“RISC”), which is a
“guidance manual that describes how to achieve consistent closure of contaminated soil
and groundwater using existing IDEM programs.” http://www.in.gov/idem/4198.htm
(last visited June 26, 2012).
In November of 2005, AEC informed IDEM that there had been “[a] release of
hazardous substances” at the Site. (App. 462). On or about September 15, 2006, IDEM
sent a certified letter to Phillips, “requesting” that Peniel, as “a potentially responsible
2
“‘Closure’ is IDEMs written recognition that a party has demonstrated attainment of specific
investigative of remediation objectives for contaminants in a particular area.”
http://www.in.gov/idem/files/remediation_closure_guide_sect_01.pdf (last visited June 26, 2012).
4
person,” “perform an investigation to characterize the nature and extent of the
contamination,” as provided by IDEM’s RISC and pursuant to Indiana Code section 13-
25-4-5. (App. 462).
Subsequently, AEC performed further site investigations at the behest of Peniel
and provided its findings to IDEM. The findings again revealed levels of PCE above
default closure levels. IDEM, however, did not compel remedial action, and Beech
Grove Holdings took no such action.
On November 21, 2008, Beech Grove Holdings filed a complaint against the
Appellees3 pursuant to Indiana Code section 13-30-9-2, which provides:
A person may, regardless of whether the person caused or contributed to
the release of a hazardous substance . . . into the surface or subsurface soil
or groundwater that poses a risk to human health and the environment,
bring an environmental legal action against a person that caused or
contributed to the release to recover reasonable costs of a removal or
remedial action involving the hazardous substances . . . .
Beech Grove Holdings asserted that the Appellees, “[t]hrough their actions and/or
inactions with respect to the chlorinated solvents located on the Site . . . caused and/or
contributed to the release of a hazardous substance . . .” at the Site. (App. 36).
Accordingly, pursuant to Indiana Code section 13-30-9-3, which provides for the
allocation of the “costs of the removal or remedial action in proportion to the acts or
omissions of each party” in an environmental legal action, Beech Grove Holdings sought
a judgment against the Appellees for all costs related to the PCE and TCE contamination
3
Beech Grove Holdings also named Elizabeth Bannon and Norma Thinnes as defendants. They,
however, are not parties to this appeal.
5
of the Site, including, but not limited to, “investigation, assessment, remediation,
corrective action, [and] consulting” costs. (App. 37).
The Dodsons filed their answer on February 20, 2009, wherein they denied
liability and raised as an affirmative defense that Beech Grove Holdings’s claims are
barred by the applicable statute of limitations. The Dodsons also filed a cross-claim
against their co-defendants.
Benefiel filed her answer on December 4, 2009. Benefiel denied ever operating a
dry cleaning business at the Site and therefore asserted that she was not a proper party to
either the Dodsons’ or Beech Grove Holdings’s actions. Benefiel, however, admitted that
dry cleaning chemicals were used at the Site. She also raised as an affirmative defense
that any claims were barred by the statute of limitations.
On August 11, 2010, Beech Grove Holdings filed a motion for partial summary
judgment as to liability only. The Dodsons filed a cross-motion for summary judgment,
asserting that the six-year statute of limitations provided by Indiana Code section 34-11-
2-7 barred the complaint. The Dodsons argued that the statute of limitations began to run
on February 28, 1998, when the Environmental Legal Action (“ELA”) statutes found
under Article 30 of Title 13 of the Indiana Code became effective. The Dodsons asserted
that the claim accrued on that date because Beech Grove Holdings, or its predecessors,
discovered, or could have discovered, that the Site had been contaminated prior to the
effective date of the ELA. The Dodsons further argued that Beech Grove Holdings
failed to designate evidence that the Dodsons “caused or contributed to the release of a
6
hazardous substance into the surface or subsurface soil or groundwater as required by the
ELA.” (App. 165).
On April 6, 2011, Benefiel filed a response in opposition to Beech Grove
Holdings’s motion for partial summary judgment. She argued that Beech Grove
Holdings failed to designate evidence creating a genuine issue of material fact as to
Benefiel’s liability. Specifically, Benefiel asserted that “a dispute remains regarding the
material fact of whether [she] operated a dry cleaning facility at the Site . . . .” (App.
467). She therefore argued that Beech Grove Holdings had failed to show that she caused
or contributed to the release of a hazardous substance.
Subsequently, Benefiel and the Schaefers filed motions to join the Dodsons’ cross-
motion for summary judgment, which the trial court granted. Thereafter, on June 1,
2011, Beech Grove Holdings filed its response in opposition to the cross-motion for
summary judgment. Beech Grove Holdings argued that the ten-year statute of limitations
applied to its claim; the accrual date is not the date that the ELA was enacted; and the
prior owners’ knowledge of hazardous substance contamination, if any, at the Site cannot
be imputed to Beech Grove Holdings. As to the Dodsons’ liability, Beech Grove
Holdings designated evidence in the form of the affidavit of expert witness Audrey Kortz,
AEC’s vice president, who had never visited the Site but opined that the spills of PCE
during the Dodsons’ operation of the dry-cleaning business “more likely than not reached
the subsurface soil and groundwater at the Site.” (App. 499).
7
The Dodsons filed their reply brief in support of their cross-motion for summary
judgment on August 4, 2011. Therein, they argued the claim was barred by either a six-
year or ten-year statute of limitations because Beech Grove Holdings’s “predecessors in
interest knew about the contamination since 1997 . . . .” (App. 521). Furthermore, they
designated deposition testimony of Kortz and the affidavit of expert witness Andrew
Gremos, an environmental consultant who had visited the Site, to refute that they caused
or contributed to any contamination of the Site.
The trial court held a hearing on the parties’ motions on August 8, 2011. On
November 2, 2011, the trial court issued findings of fact and conclusions of law; found
that the evidence did not establish that the Dodsons or Benefiel caused or contributed to
the contamination of the Site’s soil or groundwater; and entered summary judgment in
favor of the Appellees.
DECISION
Beech Grove Holdings asserts that the trial court erred in granting summary
judgment on the issue of the applicable statute of limitations. When reviewing a grant or
denial of summary judgment, our well-settled standard of review is the same as it was for
the trial court: whether there is a genuine issue of material fact, and whether the moving
party is entitled to judgment as a matter of law. Landmark Health Care Assocs., L.P. v.
Bradbury, 671 N.E.2d 113, 116 (Ind. 1996).
Summary judgment should be granted only if the evidence sanctioned by Indiana
Trial Rule 56(C) shows that there is no genuine issue of material fact and the moving
8
party deserves judgment as a matter of law. Ind. T.R. 56(C); Blake v. Calumet Const.
Corp., 674 N.E.2d 167, 169 (Ind. 1996). “A genuine issue of material fact exists where
facts concerning an issue which would dispose of the litigation are in dispute or where
the undisputed facts are capable of supporting conflicting inferences on such an issue.”
Scott v. Bodor, Inc., 571 N.E.2d 313, 318 (Ind. Ct. App. 1991).
All evidence must be construed in favor of the opposing party, and all doubts as to
the existence of a material issue must be resolved against the moving party. Tibbs v.
Huber, Hunt & Nichols, Inc., 668 N.E.2d 248, 249 (Ind. 1996). However, once the
movant has carried its initial burden of going forward under Trial Rule 56(C), the
nonmovant must come forward with sufficient evidence demonstrating the existence of
genuine factual issues, which should be resolved at trial. Otto v. Park Garden Assocs.,
612 N.E.2d 135, 138 (Ind. Ct. App. 1993). If the nonmovant fails to meet his burden, and
the law is with the movant, summary judgment should be granted. Id.“The fact that the parties make cross-motions for summary judgment does not alter
our standard of review. Instead, we must consider each motion separately to determine
whether the moving party is entitled to judgment as a matter of law.” Indiana Farmers
Mut. Ins. Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. Ct. App. 2000).
First, Beech Grove Holdings maintains that the trial court’s order, granting
summary judgment in favor of Benefiel, the Schaefers and Beeler, must be reversed as
“the court did not decide the case on the issue of statute of limitations at all” and “failed
9
to show the existence of any factual development that could support summary judgment
in favor of these cross-movants.” Beech Grove Holdings’s Br. at 13. We disagree.
Where, as here, the trial court makes findings in rendering summary
judgment, those findings aid in appellate review, but are not binding on this
court. Thus, findings that accompany a grant of summary judgment do not
alter the nature of our review. Rather, we will affirm a summary judgment
order if it is sustainable upon any theory or basis found in the record.
Gagan v. Yast, 966 N.E.2d 177, 184 (Ind. Ct. App. 2012) (internal citations omitted).
Thus, the fact that the trial court’s findings do not specifically address the statute of
limitations issue will not bar this court from determining whether the Appellees are
entitled to summary judgment on that basis.
Next, Beech Grove Holdings argues that its claim under the ELA is a contribution
action, and therefore, subject to a ten-year statute of limitations pursuant to Indiana Code
section 34-11-1-2.4 Beech Grove Holdings further argues that “[b]ecause a contribution
4
We note that regarding claims brought under Indiana Code section 13-30-9-2, Indiana Code section 34-
11-2-11.5 (eff. May 10, 2011) provides:
(b) Subject to subsections (c), (d), and (e), a person may seek to recover the
following in an action brought on or after the effective date of this section under
IC 13-30-9-2 or IC 13-23-13-8(b) to recover costs incurred for a removal action,
a remedial action, or a corrective action:
(1) The costs incurred not more than ten (10) years before the date the action is
brought, even if the person or any other person also incurred costs more than ten
(10) years before the date the action is brought.
(2) The costs incurred on or after the date the action is brought.
(c) Costs are eligible for recovery under subsection (b) regardless of whether any
part of the costs is incurred before the effective date of this section.
10
action under the ELA is afforded a 10-year statute of limitation from the first dollar of
environmental response costs incurred at the Site,” which Beech Grove Holdings
contends it incurred in 2005, Beech Grove Holdings asserts that its claim is timely. The
Appellees, however, argue that the claim is subject to the six-year statute of limitations
pursuant to Indiana Code section 34-11-2-7 as an action for damages against real
property.
Statutes of limitation seek to provide security against stale claims,
which in turn promotes judicial efficiency and advances the peace and
welfare of society. “The party pleading a statute of limitation bears the
burden of proving the suit was commenced beyond the statutory time
allowed.” When application of a statute of limitation rests on questions of
fact, it is generally an issue for a jury to decide.
Cooper Indus., LLC v. City of S. Bend, 899 N.E.2d 1274, 1279 (Ind. 2009) (internal
citations omitted).
Again, Beech Grove Holdings argues that the ELA is a contribution scheme.
Contribution involves the partial reimbursement of one who has discharged a common
liability. Small v. Rogers, 938 N.E.2d 18, 22 (Ind. Ct. App. 2010). “Discharge” is
defined as “[a]ny method by which a legal duty is extinguished; esp., the payment of a
(d) This section does not permit a person to revive or raise new claims in an
action brought under IC 13-30-9-2 or IC 13-23-13-8(b) that was finally
adjudicated or settled before the effective date of this section.
(e) Any person that brought an action under IC 13-30-9-2 or IC 13-23-13-8(b)
that was not finally adjudicated or settled prior to the effective date of this section
may not amend that action, or bring a new action, under this section.
11
debt or satisfaction of some other obligation.” BLACK’S LAW DICTIONARY 495 (8th ed.
2004).
In Indiana, there is a dearth of cases that address the applicable statute of
limitations under the ELA. In Cooper Indus., LLC v. City of South Bend, 863 N.E.2d
1253, 1256 (Ind. Ct. App. 2007), trans. granted, opinion vacated, 878 N.E.2d 219 (Ind.
2007) and vacated, 899 N.E.2d 1274 (Ind. 2009), this court addressed whether South
Bend’s claim under the ELA was time-barred by the general six-year statute of
limitations. The court determined that “[n]either Cooper nor the City challenge[d] the
trial court’s application of Indiana Code section 34–11–2–7, the general statute of
limitations for injury to property other than personal property.”
Upon transfer, however, the Indiana Supreme Court noted that “[t]he parties
disagree over whether South Bend conceded the six-year property damage or the ten-year
‘catch-all’ statute of limitation applies at trial.” Cooper Indus., LLC v. City of South
Bend, 899 N.E.2d 1274, 1286 n.9 (Ind. 2009). Finding that “South Bend’s ELA claim
would survive under either proposed time period,” our supreme court did not address the
purported concession, but for the sake of argument, “adopt[ed] six years as the applicable
time period.”5 Id. at 1286. Cf. Pflanz v. Foster, 888 N.E.2d 756, 758 (Ind. 2008)
(finding that the parties agreed that the general ten-year statute of limitations applied to
5
Our supreme court did recognize that the USTA provides “only a right of contribution, whereas the
ELA does not so limit seeking cost recovery from another party.” Cooper 899 N.E.2d at 1285.
Furthermore, under section six of the ELA, “an action to recover costs related to a release from an
underground storage tank may be brought under the ELA or the USTA” but not under both. See id. at
1282 (citing Indiana Code section 13-30-9-6).
12
the contribution claim asserted under Indiana’s Underground Storage Tanks Act
(“USTA”), which is a separate environmental provision). We therefore look to our
federal district court for guidance.
In Taylor Farm Ltd. Liab. Co. v. Viacom, Inc., 234 F. Supp.2d 950 (S.D. Ind.
2002), the district court addressed whether a complaint filed under the ELA is barred by
the federal Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”), where the defendant Viacom had entered into a court-approved
comprehensive settlement agreement with the Environmental Protection Agency
(“EPA”), requiring it to clean up hazardous waste at a site that had been operated as a
landfill. Viacom argued that the CERCLA’s “contribution bar”6 prevented Taylor from
making a contribution claim against it, while Taylor argued that “because it did not
contribute in any way to the original contamination,” it was not suing Viacom for
contribution. 234 F. Supp.2d at 962.
The Taylor-court found that the ELA “is not, on its face, a contribution scheme”
because it “permits ‘any person’ to sue to ‘recover the reasonable costs of a removal or
remedial action.’” Id. (citing Indiana Code section 13-30-9-2). But Cf. Bernstein v.
Bankert, No. 1:08-CV-0427-RLY-DML, 2010 WL 3893121, at *10 (S.D. Ind. Sept. 29,
2010) (citing to Pflanz, which, again, addressed the statute of limitations under the USTA
not the ELA, in finding that the “ELA contains no provision for limitation of actions;
6
Section 113(f)(2) of CERCLA provides: “A person who has resolved its liability to the United States or
a State in an administrative or judicially approved settlement shall not be liable for claims for contribution
regarding matters addressed in the settlement.”
13
therefore, the courts have applied Indiana’s ten-year statute of limitations to ELA claims
for contribution”). The Taylor-court explained that “[c]ontribution is an action among
parties who have been found to be liable for at least some portion of the damages alleged
in the underlying lawsuit,” id., and that “[u]nder the common law of contribution, only a
defendant in a lawsuit, or a party who has already been found liable in a previous action
may bring a claim for contribution.” Id. at 972.
Here, we agree with the district court holding in Taylor. We cannot say that a
claim brought under the ELA is a claim for contribution where it allows a plaintiff who is
neither liable for the release of a hazardous substance nor has been found liable, to
recover the costs of remediation from another party “without regard to the plaintiff’s part
in causation of the damage.”7 See Cooper, 899 N.E.2d at 1285. Accordingly, we find
that the ELA is subject to the six-year statute of limitations pursuant to Indiana Code
section 34-11-2-7(3) (providing that actions for injuries to real property must be
commenced within six years after the cause of action accrues).
Having found that Beech Grove Holdings’s claim is subject to a statute of
limitations of six years, we now must address whether the claim is timely under Indiana
Code section 34-11-2-7.
7
The “plain language” of Indiana Code section 13-30-9 makes it clear that the legislature did not intend
the ELA to be a contribution-only statute, where its purpose clearly is meant to “shift the financial burden
of environmental remediation to the parties responsible for creating contaminations” as “an incentive for
potential [innocent] buyers of contaminated land who might be deterred by the substantial costs to clean
up the land, thus preventing not only the cleanup but also redevelopment and economic renewal.”
Cooper, 899 N.E.2d at 1284.
14
A cause of action accrues under this statute “when a claimant knows, or in
the exercise of ordinary diligence should have known of the injury.” “The
determination of when a cause of action accrues is generally a question of
law for the courts to determine. For claims to accrue, it is not necessary that
the full extent of the damage be known or even ascertainable, but only that
some ascertainable damage has occurred.”
Martin Oil Mktg. Ltd. v. Katzioris, 908 N.E.2d 1183, 1187 (Ind. Ct. App. 2009) (internal
citations omitted), trans. denied; see also Cooper, 899 N.E.2d at 1286 (stating that under
the ELA “the statute of limitation will begin to run on the earlier date of actual discovery
or when a reasonable person would discover the facts”).
In this case, Beech Grove Holdings filed its complaint on November 21, 2008.
Thus, we must determine if Beech Grove Holdings knew of, or reasonably could have
discovered, the damage to the Site before November 21, 2002.
Beech Grove Holdings does not quarrel with the general rule of law that “parties
are usually held accountable for the time which has run against their predecessors in
interest.” Beech Grove Holdings’s Reply Br. at 6-7. See Cooper, 899 N.E.2d at 1279
(“Indiana adheres to the rule that ‘third parties are usually held accountable for the time
running against their predecessors in interest.’” (quoting Mack v. Am. Fletcher Nat’l
Bank and Trust Co., 510 N.E.2d 725, 734 (Ind. Ct. App. 1987), trans. denied)).
Furthermore, Beech Grove Holdings concedes, and the designated evidence shows, that
its predecessors-in-interest discovered or knew of the contamination at the Site as early as
1997. See Beech Grove Holdings’s Reply Br. at 7.
15
Beech Grove Holdings, however, would not have had a cause of action until the
ELA became effective on February 28, 1998, and therefore, “the statute of limitation
could not have begun to accrue until that date” or after that date. See Cooper, 899 N.E.2d
at 1285. According to the designated evidence, Churchman Hill Associates, the
predecessor-in-interest, became aware of the contamination as early as 1997, and
certainly no later than 2000, the year ATC prepared a second environmental assessment
of the Site on behalf of, and reported the detection of PCE and TCE in soil and
groundwater samples to, Churchman Hill Associates. Thus, Beech Grove Holdings’s
predecessor-in-interest knew of the contamination of the Site for at least eight years
before Beech Grove Holdings commenced the action. We therefore find that Beech
Grove Holdings is barred from bringing its claim under the ELA. Accordingly, the
Appellees are entitled to summary judgment as a matter of law. Because this issue is
dispositive, we need not address Beech Grove Holdings’s argument that the trial court
“erred in finding that no genuine issues of material fact remain regarding whether the
Dodsons ‘caused or contributed’ to the release of the hazardous substance at the Site.”
Beech Grove Holdings’s Br. at 18.
Affirmed.
NAJAM, J., and RILEY, J., concur.
16