Proctor v. 7-Eleven, Inc.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1598
VERNON PROCTOR; ANNIE PROCTOR; WALLACE P.
MILLS, SR.; BETTY JO MILLS; DEVONA SNYDER;
GLENDA PIERCE; NANCY ROPER; STEVEN W. JENKINS,
Plaintiffs - Appellants,
versus
7-ELEVEN, Incorporated, a Texas Corporation;
RUBY C. GAITHER,
Defendants - Appellees.
Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg. W. Craig Broadwater,
District Judge. (CA-02-21-3)
Argued: March 15, 2006 Decided: May 18, 2006
Before WIDENER and WILLIAMS, Circuit Judges, and William L. OSTEEN,
United States District Judge for the Middle District of North
Carolina, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Paul Gregory Taylor, Martinsburg, West Virginia, for
Appellants. Charles F. Printz, Jr., BOWLES, RICE, MCDAVID, GRAFF
& LOVE, P.L.L.C., Martinsburg, West Virginia, for Appellees. ON
BRIEF: Brian M. Peterson, BOWLES, RICE, MCDAVID, GRAFF & LOVE,
P.L.L.C., Martinsburg, West Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
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PER CURIAM:
This diversity action arises out of a gasoline leak from an
underground storage tank at a 7-Eleven, Inc. gas station in early
2001. The Appellants, Vernon and Annie Proctor, Wallace and Betty
Jo Mills, Devona Snyder, Glenda Pierce, Nancy Roper, and Steven W.
Jenkins (collectively the “property owners”), residential property
owners neighboring the 7-Eleven, filed suit in West Virginia state
court against 7-Eleven and a store manager at the 7-Eleven alleging
claims for negligence, strict liability in tort, trespass and
nuisance, and punitive damages caused by the leaking of gasoline
onto their property. After 7-Eleven removed the case to federal
court, the property owners moved to remand the case and to amend
their complaint. The district court denied both motions,
ultimately granting summary judgment to 7-Eleven on all of the
property owners’ claims for relief. The Appellants now appeal the
grant of summary judgment and the district court’s orders
precipitating the summary judgment order. For the following
reasons, we affirm, finding no error in the district court’s
orders.
I.
In February 2002, the property owners filed suit in West
Virginia state court against 7-Eleven and a local store manager
that they believed was responsible for the leak. The named manager
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was a West Virginia resident, 7-Eleven is a Texas corporation, and
all of the property owners are West Virginia residents. The
property owners alleged that 7-Eleven and the manager had been
negligent in storing and dispensing the gasoline, that 7-Eleven and
the manager were strictly liable for the damage inflicted by the
ultra-hazardous gasoline, and that the infiltration of gasoline
onto their property constituted a nuisance or trespass. The
property owners sought monetary damages for the fair market value
of their real estate, punitive damages, annoyance and inconvenience
damages, damages for emotional distress, out-of-pocket losses,
medical expenses, and mental anguish.
On March 28, 2002, 7-Eleven removed the case to federal court
alleging that diversity jurisdiction existed because the property
owners could not establish a cause of action against the non-
diverse manager because she was not the manager of the 7-Eleven at
the time the leak occurred. The district court dismissed the
former manager from the suit. The property owners moved to remand
the case and sought to amend their complaint to add the correct
manager. By the time that the property owners discovered the name
of the responsible manager, however, the district court concluded
that the statute of limitations had run against that manager. The
district court therefore denied the property owners’ motion to (1)
remand the case and (2) to amend their complaint, and the property
owners did not seek interlocutory review of this order.
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During the discovery period, the property owners filed an
action before the Jefferson County (West Virginia) Commission Board
of Review and Equalization (the Board) seeking a reduction in the
value of their properties and corresponding taxes. The Board found
that each of the properties had suffered a 75% decrease in value
from the contamination. This finding, however, was temporary and
the Board instructed the property owners that they must request the
reduction each year until their properties had been fully
remediated.
Upon learning of the Board’s 75% reduction in value
determination, 7-Eleven filed a motion in limine to exclude
evidence of the Board’s findings, arguing that the Board’s
determination as to “diminished value” was irrelevant and highly
prejudicial. The district court agreed and granted the motion to
exclude.
Also during the discovery process, Mr. Mills, one of the
property owners, died. The property owners then moved to
substitute the administrator of Mr. Mills’s estate as a party. The
district court denied the motion to substitute, reasoning that
substitution was unnecessary as Mr. Mills held his property in a
co-tenancy with his wife, who survived him and was already a
plaintiff in the suit.
Ultimately, 7-Eleven moved for summary judgment on all claims
and the district court granted the motion. The property owners
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filed this appeal and we have jurisdiction over this diversity suit
pursuant to 28 U.S.C.A. § 1332 (West Supp. 2005) and 28 U.S.C.A. §
1291 (West 1993). The property owners seek review of the following
lower court decisions: the denial of the motion to remand, the
denial of the motion to amend their complaint, the grant of summary
judgment on all of their claims, the exclusion of the Board’s 75%
reduction in value determination, and the denial of the motion to
substitute. We will address each of their contentions in turn.
II.
We begin with the property owners’ argument that the district
court erred in denying their motion to amend the complaint and
their motion to remand the case to West Virginia state court. The
local manager the property owners sought to add was a West Virginia
resident, and the amendment would have destroyed diversity
jurisdiction in the case. See 28 U.S.C.A. § 1332. Thus, the
motion to remand is inextricably tied to the motion to amend.
Without the amendment of the complaint, diversity jurisdiction
existed, and a remand would have been erroneous. Because the
motions are linked together, we can dispose of them jointly.
It is well-established in this circuit that
[w]here a matter has proceeded to judgment on the merits
and principles of federal jurisdiction and fairness to
parties remain uncompromised, to disturb the judgment on
the basis of a defect in the initial removal would be a
waste of judicial resources. Although the interest in
judicial economy is most pressing where an action has
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proceeded to trial, we feel that the same considerations
are applicable to summary judgment.
Aqualon Co. v. MAC Equip., Inc., 149 F.3d 262, 265 (4th Cir.
1998)(internal quotation marks omitted). Thus, “even if remand
would have been proper, once an improperly removed case has
proceeded to final judgment in federal court that judgment should
not be disturbed so long as the federal court had jurisdiction over
the claim at the time it rendered its decision.” Id. at 264; see
also Caterpillar Inc. v. Lewis, 519 U.S. 61, 77 (1996) (“To wipe
out the adjudication postjudgment, and return to state court a case
now satisfying all federal jurisdictional requirements, would
impose an exorbitant cost on our dual court system, a cost
incompatible with the fair and unprotracted administration of
justice.”).
Because there is no dispute that diversity jurisdiction
existed at the time the district court granted summary judgment to
7-Eleven, we do not further address the motion to remand. The
property owners have failed to demonstrate any exceptional
circumstances that require us to review the merits of that motion.
Aqualon, 149 F.3d at 265 (declining to review merits of remand when
case proceeded to final judgment in federal court and the party
requesting remand “has not argued that it was prejudiced in some
way by the federal forum”). And because we will not vacate the
judgment based on any error that occurred in the motion to remand,
we need not address the merits of the motion to amend.
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III.
We now turn to the property owners’ argument that the district
court erred in granting summary judgment to 7-Eleven. We review
the grant of summary judgment de novo, “viewing the disputed facts
in the light most favorable to” the nonmoving party. Toll Bros.,
Inc. v. Dryvit Sys., Inc., 432 F.3d 564, 568 (4th Cir. 2005).
“Summary judgment is warranted when the admissible evidence
forecasted by the parties demonstrates that no genuine issue of
material fact exists and that the moving party is entitled to
judgment as a matter of law.” Id. (internal quotation marks
omitted).
The property owners brought the following three classes of
claims against 7-Eleven: real property claims, personal injury
claims, and a punitive damages claim. We will address the grant of
summary judgment on each set of claims.
a. Real Property Claims
Turning first to the property owners’ claims for damage to
their real properties, we look to West Virginia law on real
property damage to assess the claims. Jarrett v. Harper & Son,
Inc., 235 S.E.2d 362 (W. Va. 1977), is the seminal West Virginia
case on property damage. Jarrett sets forth the following rule:
When realty is injured the owner may recover the cost of
repairing it plus his expenses stemming from the injury
including loss of use during the repair period. If the
injury cannot be repaired or the cost of repair would
exceed the property’s market value, then the owner may
recover the money equivalent of its lost value plus his
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expenses resulting from the injury including loss of use
during the time he has been deprived of his property.
Id. at 365. When 7-Eleven received notice of the leak and its
contamination, it identified the leaking tank and began the
remediation process as required by federal law and West Virginia
law. See 40 C.F.R. § 280.53 (2005); W. Va. Code Ann. § 22-17-14(LexisNexis 2002). The remediation process was ongoing at the time
7-Eleven moved for summary judgment, and 7-Eleven and its insurer
were paying the full costs of cleaning the properties. Because 7-
Eleven has paid the full costs of remediation for the properties,
the property owners seek damages in the form of diminution in
value.
In a typical case, a plaintiff may recover the diminution in
value only where the property cannot be repaired or the cost of
repair exceeds the market value of the property. The property
owners in this case cannot recover for diminution in value because
the restoration process is ongoing and the property owners
recognize that their properties will be restored pursuant to state
and federal law. Because the law requires that 7-Eleven restore
the properties and the process remains ongoing, if we allowed the
property owners to recover for diminution in value, at this
juncture, they may ultimately receive double recovery for the same
loss by having their properties restored and receiving diminution
in value damages. Such double recovery is not contemplated by
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Jarrett, which sets forth an “either or” option for repair damages
or loss of value damages. Thus, the property owners may not
receive damages for any temporary diminution in value of their
properties and the grant of summary judgment on the real property
damages was appropriate.
b. Personal Injury Claims
The property owners next argue that the district court erred
in granting summary judgment on their claims for annoyance and
inconvenience, mental anguish, and emotional distress. Seven-
Eleven contends that the district court properly granted summary
judgment on these grounds because the property owners failed to
present evidence sufficient to support these claims.
Pursuant to Federal Rule of Civil Procedure 56, “[w]hen a
motion for summary judgment is made and supported as provided in
this rule, an adverse party may not rest upon the mere allegations
or denials of the adverse party’s pleadings, but the adverse
party’s response, by affidavits or as otherwise provided . . .,
must set forth specific facts showing that there is a genuine issue
for trial.” At this stage of the proceedings, we, like the
district court, have the benefit of the property owners’ responses
to 7-Eleven’s interrogatories and the deposition testimony of the
property owners.
Although the property owners’ complaint included a request for
personal injury damages, the property owners’ answers to 7-Eleven’s
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interrogatories made no mention of these damages. For example, 7-
Eleven asked each of the property owners to provide “an itemized
account of those losses [stated in the complaint], including, but
not limited to, the following: (a) any lost wages and income; (b)
any medical treatments, examinations and tests; and (c) any other
out-of-pocket expenses.” (J.A. at 566.) Each of the property
owners responded to this inquiry with the following statement:
“The losses relate to damages to the value of Plaintiffs’ real
estate because of gasoline contamination. These losses have not
yet been calculated. When such a calculation is made, this
response will be supplemented.” (J.A. at 566.) At the time of the
district court’s summary judgment order, no response had been
supplemented. The interrogatories also asked the property owners
to “state with specificity the nature of the damages you claim to
have suffered to your property and to your person.” (J.A. at 566
(emphasis added).) Each of the property owners responded by
referring to his answer to the first question. None of the answers
to the interrogatories discussed any personal injury damages, such
as annoyance or inconvenience, nor did any answer mention out-of-
pocket expenses. The only damages mentioned were to “the value of
Plaintiffs’ real estate.” (J.A. at 566.)
The deposition testimony also provides no support for the
property owners’ personal injury claims. For example, Mr. Mills
stated that he had not suffered any out-of-pocket losses, the loss
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of use of his home, or medical expenses. And when asked
specifically what kind of damages he had suffered, Mr. Mills stated
only the lost value of his home. Likewise, when defense counsel
asked Ms. Snyder what damages outside of the diminution in value of
her property she had sustained, Ms. Snyder responded that she was
not aware of any other damages. Ms. Pierce also indicated in her
deposition that she had not incurred any expenses other than the
loss of value of her property. Mr. and Mrs. Proctor indicated that
on two occasions they left the house for two or three hours due to
perceived gas fumes in their home. Mr. Proctor further stated that
he had not lost any wages or income, nor had he incurred any out-
of-pocket losses or medical expenses, but that he was “stress[ed]”
about having gasoline under his home because he was concerned that
the fumes in his home could ignite. Mr. Proctor also admitted,
however, that the fumes in his home had not registered at dangerous
levels and that he never contacted emergency services when the
fumes were present. Mrs. Proctor testified that she had to leave
her house on a couple of occasions for an hour when she smelled
fumes. Mrs. Proctor also stated that personnel performing the
remediation processes installed a blower near their home, which
successfully drew the fumes out of the house in less than an hour.
Finally, Mr. Jenkins testified that the loss he suffered from the
gasoline leak was the decrease in value of his home. Mr. Jenkins
also testified that he feared the gasoline fumes would give him
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cancer, so he moved his office out of the contaminated property and
into his home. Mr. Jenkins further stated that he is not seeking
any lost profits from the relocation of his office and no out-of-
pocket expenses, such as moving costs or new furniture. Mr.
Jenkins has not undergone any testing to determine whether he has
actually been exposed to Benzene, the carcinogenic agent found in
gasoline. Mr. Jenkins also stated that he has rented the property
since the gasoline spill.
In summary, only Mr. Jenkins and the Proctors have actually
indicated that the gasoline leak changed any part of the routines
of their lives. The Proctors’ claims for leaving their house on a
couple of occasions for approximately one hour are minimal at best.
Mr. Jenkins’s claim for the loss of use of his office relates not
to the gasoline fumes, but to his unfounded fear of cancer.
Despite Mr. Jenkins’s alleged fear of cancer, he has not undergone
any medical testing, nor did he contact emergency personnel to
determine whether any hazardous fumes were actually in his house.
Notably, unlike the Proctors, Mr. Jenkins never stated that he
smelled fumes in his home. Because Mr. Jenkins has only provided
us with his personal belief that he would develop cancer if he
continued to work in the affected property, his claim for loss of
use is, at most, speculative and without a basis in fact. Mr.
Jenkins gives no explanation why he cannot work on his property
when renters occupying his property and his neighbors have had no
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trouble remaining in their homes throughout the remediation
process. The de minimus nature of the Proctors’ loss of use, the
unsubstantiated basis for Mr. Jenkins’s loss of use, and the
failure of the other property owners to allege any form of loss of
use require us to affirm the district court’s grant of summary
judgment on the claims for personal injury damages.
c. Punitive Damages Claim
We now turn to the district court’s grant of summary judgment
on the punitive damages claim. The property owners contend that 7-
Eleven recklessly and intentionally leaked gasoline onto their
properties. See Alkire v. First Nat’l Bank of Parsons, 475 S.E.2d
122, 129 (W. Va. 1996) (holding that a plaintiff is entitled to a
punitive damage award “in actions of tort, where gross fraud,
malice, oppression, or wanton, willful, or reckless conduct or
criminal indifference to civil obligations affecting the rights of
others appear”). Under West Virginia law, the property owners may
not recover punitive damages unless they also recover compensatory
damages. Garnes v. Fleming Landfill, Inc., 413 S.E.2d 897, 908 (W.
Va. 1991). Thus, because the property owners have failed to
demonstrate any compensable injury, no punitive damages may be
awarded under West Virginia law. Moreover, 7-Eleven’s conduct in
reporting and remedying the leak hardly constitutes reckless or
intentional conduct. Seven-Eleven has stated that a discrepancy in
the gasoline storage tanks was first found in January 2000,
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confirmed in February 2000, and reported to the state of West
Virginia on February 24, 2000. This prompt investigation and
notification to West Virginia coupled with 7-Eleven’s compliance
with the mandated clean-up procedures reflect 7-Eleven’s respect
for the law and its neighbors. We therefore affirm the district
court’s grant of summary judgment to 7-Eleven on the punitive
damages claim.
IV.
Next, the property owners contend that the district court
erred in excluding from evidence the West Virginia Board of
Equalization and Review’s valuation of the affected properties. We
review “the decision of a district court to admit or exclude
evidence for abuse of discretion.” Westberry v. Gislaved Gummi AB,
178 F.3d 257, 261 (4th Cir. 1999). As discussed above, West
Virginia law does not allow for the recovery of diminution in value
in this case, and therefore any evidence of diminution in value
would be necessarily irrelevant. The district court did not abuse
its discretion in excluding from evidence the Board’s assessment.
V.
Finally, we address whether the district court properly denied
the motion to substitute. We review the denial of a motion to
substitute a party under Rule 25 of the Federal Rules of Civil
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Procedure for abuse of discretion. E.I. Dupont De Nemours & Co. v.
Lyles & Lang Constr. Co., 219 F.2d 328, 332 (4th Cir. 1955). In
light of our affirmance of the summary judgment order, however, we
hold that any error in the denial of the motion to substitute
would be harmless.* See Fed. R. Civ. P. 61 (“The court at every
stage of the proceeding must disregard any error or defect in the
proceeding which does not affect the substantial rights of the
parties.”).
VI.
In summary, we find no error in the district court’s orders
denying the property owners’ motions to remand and to amend their
complaint, granting summary judgment to 7-Eleven on all claims,
granting the motion to exclude the Board’s valuation of the
afflicted properties, and denying the property owners’ motion to
substitute. The district court is therefore
AFFIRMED.
*
The district court denied the property owners’ motion to
substitute the administrator of Mr. Mills’s estate because Mr.
Mills held his property in a co-tenancy with his surviving wife who
was already a plaintiff in the suit. We note that under West
Virginia law, the death of one co-tenant does not terminate a suit
where the action is for the recovery of damages to jointly owned
property. Rowe v. Shenandoah Pulp Co., 26 S.E. 320, 322 (W. Va.
1896).
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