5200 Keystone Limited Realty, LLC v. Filmcraft Laboratories, Inc., Eric J. Spicklemire, Portrait America, Inc., A.C. Demaree, Inc., Clean Car, Inc., and The Wax Museum & Auto Sales, Inc.

• Court: Indiana Court of Appeals
• Decided: April 14, 2015
• Docket: 49A02-1403-CT-188
• Status: Published

Opinion

Apr 14 2015, 9:58 am

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE ERIC J. SPICKLEMIRE George M. Plews Brianna J. Schroeder Thomas F. O’Gara Jonathan Penn Bradley R. Sugarman Plews Shadley Racher & Braun Jeffrey D. Stemerick LLP Taft Stettinius & Hollister, LLP Indianapolis, Indiana Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

5200 Keystone Limited Realty, April 14, 2015 LLC, Court of Appeals Case No. Appellant-Defendant, 49A02-1403-CT-188

v. Appeal from the Marion Superior Court Cause No. 49D07-0310- Filmcraft Laboratories, Inc., Eric CT-003394 J. Spicklemire, Portrait America, The Honorable Michael D. Inc., A.C. Demaree, Inc., Clean Keele, Judge Car, Inc., and The Wax Museum & Auto Sales, Inc., Appellee-Plaintiff

Friedlander, Judge.

[1] This litigation involves a dispute over responsibility for the costs of

environmental cleanup of commercial real estate (the Site) located near the

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 1 of 26 corner of 52nd St. and Keystone Avenue in Indianapolis. 5200 Keystone

Limited Realty, LLC (KLR) acquired the subject property from Apex Mortgage

Corporation (Apex) after Apex had acquired the property through foreclosure

proceedings against Eric Spicklemire, who purchased the property in 1981.

Apex filed its complaint against Filmcraft Laboratories, Inc. (Filmcraft), a

company owned by Spicklemire. The complaint alleged causes of action under

these three statutes: 1) Ind. Code Ann. § 13-11-2-70.3 (West, Westlaw current

with legislation of the 2015 First Regular Session of the 119th General

Assembly effective through March 24 2015) (creating an “environmental legal

action” (ELA), which is a legal action “brought to recover reasonable costs

associated with removal or remedial action involving a hazardous substance or

petroleum released into the surface or subsurface soil or groundwater that poses

a risk to human health and the environment”); 2) Ind. Code Ann. § 13-30-3-

13(d) (West, Westlaw current with legislation of the 2015 First Regular Session

of the 119th General Assembly effective through March 24, 2015) (creating an

action to recover reasonable expenses and attorney fees incurred by a

landowner on whose land solid waste has been illegally dumped); and 3) Ind.

Code Ann. § 6-1.1-22-13 (West, Westlaw current with legislation of the 2015

First Regular Session of the 119th General Assembly effective through March

24 2015) (liability for back property taxes). KLR was substituted as plaintiff

after it purchased the Site from Apex. Shortly thereafter, KLR amended its

complaint, adding as defendants Spicklemire, Portrait America, Inc., A.C.

Demaree, Inc., Russ Dellen, Inc. (RDI), Clean Car, Inc., and The Wax

Museum & Auto Sales. KLR appeals the grant of Spicklemire’s motion to Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 2 of 26 dismiss with respect to KLR’s statutory causes of action, and a grant of

summary judgment with respect to certain common-law claims presented by

KLR at trial. KLR presents the following consolidated, restated issues for

review:

1. Did the trial court err in excluding expert testimony regarding whether the Wax Museum & Auto Sales and Clean Car caused or contributed to the contamination at the Site? 2. Did the trial court err in entering summary judgment against KLR on its common-law claims? 3. Did the trial court err in dismissing KLR’s complaint pursuant to Trial Rule 41(B) on grounds that KLR failed to present sufficient evidence to show Spicklemire caused or contributed to chlorinated solvent and petroleum hydrocarbon contamination of the Site? [2] We affirm.

[3] In order to understand the issues involved in this case, we must first set out in

detail the history of the ownership and activity on the Site. A.C. Demaree Inc.

(Demaree) owned and operated a commercial dry cleaning business on the Site

from at least 1948 to 1973. It is undisputed that during this time, dry cleaners

used two solvents to clean textiles: perchloroethylene, a chlorinated solvent,

and Stoddard solvent, a petroleum hydrocarbon. Demaree stored these solvents

in tanks at the Site.

[4] In 1973, Demaree sold the Site to Robert Dellen, who in turn conveyed the Site

in 1979 to Dellen Realty, Inc. (Dellen Realty), a predecessor of RDI. From

1974 to 1981, Filmcraft leased the Site from Dellen and Dellen Realty. In Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 3 of 26 January 1981, Spicklemire and his father purchased the Site from Dellen

Realty, and from 1981 to 2000, Spicklemire leased the site to Filmcraft.

Spicklemire was a shareholder, officer, and employee of Filmcraft, and became

the company’s president in 1994, when he became sole owner of Filmcraft and

the Site. He remained in this position until the company ceased operation.

Portrait America, also a Spicklemire-owned entity, leased the Site from 2000 to

2001. During its years of operation, Filmcraft sublet the back of the Site to

several auto-detailing operations. These included Clean Car, Inc. and The Wax

Museum & Auto Sales (collectively, the Detailers).

[5] During the time its business was located on the Site, i.e., 1974 to 2000 or 2001,

Filmcraft operated a commercial photo-processing operation. This process was

accomplished by the use of machines, which ran approximately eight to twelve

hours per day. These machines processed film and printed images on paper.

The processing generally involved the feeding of paper through a machine that

sent the film or paper through a series of chemical baths and water-wash tanks.

The chemicals used in this process included bleaches, fixers, and stabilizers

manufactured by Kodak and other suppliers. Such chemicals were highly

diluted by water. None of these chemicals contained chlorinated solvents.

Filmcraft documents indicate that the only petroleum hydrocarbon used in

Filmcraft’s operation were white grease and photographic lacquer. White

grease was used to lubricate a single piece of equipment, and a single, three- to

four-inch tube lasted the entire time that Filmcraft was in operation on the Site.

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 4 of 26 [6] During his ownership of the Site, Demaree had installed trench drains

throughout the Site that connected to the sewer. Later, photo-processing

chemicals spent in Filmcraft’s operations were discharged from its machines

through a silver recovery device in the form of an effluent and, per

manufacturer recommendations and standard industry practice, discharged into

the trenches Demaree had installed. This effluent contained minute amounts of

silver but did not contain chlorinated solvents or petroleum hydrocarbons.

Subsequent testing indicated the presence of silver in a sediment sample

collected from inside the trench where photo-processing effluent was

discharged. No silver above regulatory action levels, however, was found in the

soil and groundwater samples taken at the Site in 2013. On occasion, paper

from the paper processor would clog the drain and form a sludge. This sludge

did not contain chlorinated solvents or petroleum hydrocarbons. In 2013, the

sewer lines were scoped by Gurney Bush, Inc. (GBI) with a video camera,

which revealed certain offset joints in the sewer line, but no leaks were found.1

Also, GBI’s investigation confirmed that the sewer on the Site was usable and

that water sent down the pipes went into the city’s main sewer line.

[7] Filmcraft used small cans of aerosol lacquer that were approximately the size of

a can of spray paint. Each can would last approximately one month, and the

aerosol lacquer was applied directly to photographs in a ventilated area on the

Site. Any overspray ended up on a peg board that was used to hold the

1 Indeed, GBI indicated that its procedure was not intended to look for leaks.

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 5 of 26 photographs or was vented out of the building through an exhaust fan. The

testing indicated that no lacquer was released to the soil or groundwater at the

Site.

[8] As indicated, the rear part of the Site was sublet to various auto-detail

companies during Filmcraft’s operation. The rear of the Site was separated

from Filmcraft’s operation by a wall and a windowless door. The Detailers had

their own main entrance to the Site on the outside of the building. Spicklemire

was not in any way involved with the Detailers’ operations and had no

knowledge of whether they used chemicals in their operations, much less what

those chemicals would have been if indeed any were used. His interaction with

those tenants was confined primarily to going to the rear of the Site to collect

rent when it was overdue. Also, on occasion, Spicklemire would go to the

Detailers and asked them to stop running cars inside the building when that

occurred. On four or five occasions, Spicklemire brought photo-processing

machinery through the garage door located in the Detailers’ space. Spicklemire

claimed to have no knowledge of any chemical releases by the Detailers.

[9] In 2001, Spicklemire defaulted on the mortgage and abandoned the Site. Apex

foreclosed and acquired title via a sheriff’s deed, purchasing the Site via a credit

bid of $240,000. After it acquired the property, Apex hired Keramida

Environmental, Inc. (Keramida) in 2002 to conduct soil and groundwater

samples at the Site. Keramida issued a report detailing the contamination it

had discovered and suggesting further evaluation. Keramida’s report estimated

that the cost of remediation for the problems it discovered would exceed

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 6 of 26 $150,000. On October 9, 2003, Apex filed this action against Filmcraft. After

the lawsuit was filed, Portrait America paid Patriot Environmental &

Engineering, Inc. (Patriot) to inventory and remove all chemicals from the Site.

The chemicals removed included a gas can, motor oil, and various paints.

None of these chemicals were used in Filmcraft’s operations.

[10] “After full and complete disclosure of all potential environmental issues known

to Apex as a result of the Keramida [inspection]”, Apex sold the Site to KLR

for $20,000 in 2014. Exhibit 8B, paragraph 6, Admitted Exhibits Binder2

(Exhibits Binder). “Apex accepted the $20,000 sale price for the Site from

[KLR] as a discount from the earlier appraised value of $400,000 because of the

potential environmental contamination at the Site discussed in Keramida’s

Phase II report [.]” Id. At this point, KLR was substituted for Apex as plaintiff

in the present lawsuit. In 2013, KLR hired Terra Environmental Corporation

(Terra) to perform additional tests on the Site. Terra’s test results essentially

duplicated those of the tests performed earlier by Keramida in that they

revealed the presence of chlorinated solvents and petroleum hydrocarbons in

soil and groundwater samples.

[11] As indicated above, the original and amended complaints alleged three

statutory causes of action, including an ELA complaint under I.C. § 13-11-2-

70.3 to recover costs associated with remediation of hazardous substances

2 The pages in the Admitted Exhibits Binder (two volumes) are not numbered. The exhibits are, however, arranged in numerical order and tabbed, which expedited our review.

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 7 of 26 released into the soil or groundwater on the Site, an action under I.C. § 13-30-3-

13(d) to recover expenses and attorney fees incurred because solid waste was

illegally dumped on the Site, and an action under I.C. § 6-1.1-22-13 against

Spicklemire for back taxes owed on the Site. Ultimately, default judgments

were entered in favor of KLR against Demaree, the Wax Museum & Auto

Sales, and Clean Car. Claims against Portrait America were settled before trial.

Russ Dellen, Inc. prevailed on summary judgment. Therefore, all that

remained were the claims presented in a second amended complaint filed by

KLR against Filmcraft and Spicklemire.

[12] On March 28, 2013, KLR filed its Plaintiff’s Preliminary Contentions,

Itemization of Damages, and Witness/Exhibit Lists (Plaintiff’s Preliminary

Contentions), setting out for the first time among its “preliminary itemization of

damages” common-law claims for lost rent and lost use. In response,

Spicklemire sought summary judgment on KLR’s common-law claims on

grounds that they were never pleaded and that in any event they are not

available to a property owner against a prior owner of the same property. KLR

challenges the trial court’s grant of this motion, which the trial court entered

upon its finding that KLR was not entitled to recover economic damages under

the ELA and that KLR had not pleaded any common-law claims.

[13] Trial commenced against the remaining parties on the remaining counts on

February 19-21, 2014. At the conclusion of KLR’s case-in-chief, Spicklemire

and Filmcraft moved for involuntary dismissal under Trial Rule 41(B), arguing

that upon the weight of the evidence presented by KLR, there had been no

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 8 of 26 showing of a right to relief. The trial court granted this motion and dismissed

the complaint. KLR appeals the grant of the T.R. 41(B) motion and the grant of

summary judgment on KLR’s common-law claims, as well as the exclusion of

certain expert testimony.

1.

[14] We begin with KLR’s evidentiary claim that the trial court erred in disallowing

KLR’s expert, Douglas Zabonick, Keramida’s president, to testify about his

opinion regarding whether the auto-detailing operations conducted on the Site

during Spicklemire’s ownership more likely than not used petroleum

hydrocarbons and chlorinated solvents. During Zabonick’s direct testimony, he

was asked whether he had an opinion regarding whether the Detailers’

operations more likely than not caused or contributed to the contamination at

the Site. Spicklemire’s counsel objected and asked the following preliminary

question: “You don’t have any knowledge whatsoever as to what chemicals

these particular auto detailers were using at any time, do you?” Transcript at

909. Zabonick responded, “That would be correct.” Id. Counsel objected to

this line of questioning on the basis that Zabonick’s testimony would be “just

speculation.” Id. KLR’s counsel then proceeded to question Zabonick about

whether his (Zabonick’s) car had ever been to an auto detailing shop, and he

responded that it had. When Zabonick was asked to describe that process,

Spicklemire’s counsel objected on grounds that “whatever nice experience Mr.

Zabonick may have had with the detailing of his car is utterly irrelevant to what

was going on with these auto detailers.” Id. at 912. Spicklemire’s counsel again

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 9 of 26 objected on grounds that Zabonick’s testimony as it applied to the facts of the

present case was “inherently speculative.” Id. KLR contends the trial court

erred in sustaining the objection.

[15] Indiana Evidence Rule 702 governs the admissibility of expert testimony, and

provides as follows:

(a) A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue. (b) Expert scientific testimony is admissible only if the court is satisfied that the scientific principles upon which the expert testimony rests are reliable. [16] The admissibility of expert testimony under Evid. R. 702 is a matter within the

trial court’s broad discretion and we will reverse such determinations only for

an abuse of that discretion. Estate of Borwald v. Old Nat’l Bank, 12 N.E.3d 252

(Ind. Ct. App. 2014). Expert testimony admitted under Rule 702 requires more

than subjective belief or unsupported speculation. Armstrong v. Cerestar USA,

Inc., 775 N.E.2d 360 (Ind. Ct. App. 2002), trans. denied. In conducting our

review, we presume the trial court’s decision is correct, and the party

challenging that decision bears the burden of persuading us that the trial court

abused its discretion. Id.

[17] Citing Vaughn v. Daniels Co., 841 N.E.2d 1133 (Ind. 2006), KLR argues that the

trial court’s ruling improperly requires that in order to be admissible, an expert’s

testimony must be based on first-hand experience. In Vaughn, the trial court

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 10 of 26 struck a paragraph in an affidavit completed by an expert and submitted by the

opponent of a motion for summary judgment. Among other things, the

proponents of the affidavit contended that the trial court erred in excluding that

paragraph on grounds that the opinion lacked the requisite foundation. The

trial court’s ruling was premised upon the fact that the expert did not view the

equipment in question, but rather reviewed only documents setting forth the

defendant’s proposal with respect to the equipment. Our Supreme Court

reversed, holding that the expert’s prior experience and review of documents

relating to the proposal provided a sufficient foundation for the expert opinion

and that it was not necessary for the expert to have actually seen the equipment

in question for him to render an expert opinion.

[18] Although it is true that the Vaughn expert was permitted to offer opinion

testimony even though he had not seen the equipment in question, it cannot

fairly be said that the resulting opinion was based on “pure speculation.” The

expert’s opinion as to the safety of the equipment at issue was based upon his

review of a design drawing of that equipment rendered by its creator, who also

happened to be a defendant. We reiterate, however, that in the present case,

Zabonick admitted that he did not have “any knowledge whatsoever as to what

chemicals these particular auto detailers were using at any time [.]” Transcript

at 909. Thus, it appears that the only evidence that the Detailers could have

caused or contributed to the particular contamination found at the Site involved

pure speculation on Zabonick’s part as to what chemicals they used. This is not

legally sufficient. See Estate of Dyer v. Doyle, 870 N.E.2d 573, 581 (Ind. Ct. App.

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 11 of 26 2007) (the appellant challenged the admission of expert testimony regarding the

faked left syndrome,3 arguing that there was no evidence that the factual

scenario occurred in which the syndrome would be applicable; the court

reversed upon observing that the plaintiff “admitted during cross-examination

that there was no evidence that [the decedent] was ever in [the defendant’s]

lane” and that “there must be some evidence other than the opinion itself that

there was a ‘faked left’ occurrence for the opinion to pass muster”), trans. denied.

The trial court did not err in excluding this evidence.

2.

[19] KLR contends the trial court erred in granting summary judgment in favor of

Spicklemire on KLR’s common-law claims of lost rent and loss of use. The

trial court held, in pertinent part:

The Second Amended Complaint makes no mention of any common law claims. Nor are the operative facts asserted against Spicklemire sufficient for a reasonable person to be on notice that [KLR] is making claims under any common law theories. The facts pled in [KLR’s] Second Amended Complaint are simply not

3 This was explained in Smith v. Yang, 829 N.E.2d 624, 627 (Ind. Ct. App. 2005) as follows:

This syndrome is seen near curves and/or hill crests where an initial vehicle enters the area left of center and the other driver steers to the left, now being left of center in avoidance, when the initial vehicle steers back to the right and a head-on collision occurs in the initial vehicle’s traveling lane.

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 12 of 26 sufficient to put a reasonable person on notice that [KLR] is asserting common law claims against Spicklemire. Appellant’s Appendix at 40.

[20] Summary judgment is appropriate where the moving party shows there are no

genuine issues of material fact with respect to a particular issue or claim. Ind.

Trial Rule 56(C); Bleeke v. Lemmon, 6 N.E.3d 907 (Ind. 2014). We review a

summary judgment order de novo. Hughley v. State, 15 N.E.3d 1000 (Ind. 2014).

Considering only the facts supported by evidence designated to the trial court

by the parties, we must determine whether there is a “genuine issue as to any

material fact” and whether “the moving party is entitled to a judgment as a

matter of law.” T.R. 56(C); see also TP Orthodontics, Inc. v. Kesling, 15 N.E.3d

985 (Ind. 2014). Where the moving party designates material demonstrating

there are no genuine issues of material fact with respect to a particular issue or

claim, the burden shifts to the non-moving party to come forward with

designated evidence showing the existence of a genuine issue of material fact.

Bleeke v. Lemmon, 6 N.E.3d 907. Upon review, we will accept as true those facts

alleged by the nonmoving party. Sees v. Bank One, Ind., N.A., 839 N.E.2d 154

(Ind. 2005). “All designated evidence and reasonable inferences must be

construed in favor of the non-moving party, and doubts resolved against the

moving party.” Bleeke v. Lemmon, 6 N.E.3d at 917. The appellant bears the

burden of demonstrating that the grant of summary judgment was erroneous.

Hughley v. State, 15 N.E.3d 1000. Finally, we will affirm a grant of summary

judgment on any theory supported by the record. Holiday Hospitality

Franchising, Inc. v. AMCO Ins. Co., 983 N.E.2d 574 (Ind. 2013). Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 13 of 26 [21] KLR argues that the grant of the summary judgment was improper on the

stated grounds because Indiana is a notice-pleading state, and as such requires

only a short, plain statement of the claim showing an entitlement to relief, and a

demand for relief to which the pleader is entitled. See Ind. Trial Rule 8(A).

KLR claims that its complaint met these criteria because its second amended

complaint “pled the operative facts to support claims for lost rent and reduced

property value [.]” Appellant’s Brief at 41. In other words, the common-law

claims were tried by consent.

[22] In resolving this issue, it is important to note that at the time KLR filed its

Plaintiff’s Preliminary Contentions, the only claims that remained unresolved

were those presented in the second amended complaint against Filmcraft and

Spicklemire. In an introductory paragraph of the Plaintiff’s Preliminary

Contentions, KLR described its lawsuit against Spicklemire as an ELA action

(i.e., “[KLR] brought this Environmental Legal Action (“ELA”) against the

defendants for the payment of costs to delineate and remediate this Site”).

Appellant’s Appendix at 103. It was in this document that KLR referenced for the

first time its claim for lost rent and lost use. In response, Spicklemire filed a

motion for summary judgment on grounds that the ELA permits recovery only

of reasonable costs of removal or remedial action, and does not authorize

claims for lost rent or loss of use. See I.C. § 13-30-9-2 (West, Westlaw current

with legislation of the 2015 First Regular Session of the 119th General

Assembly effective through March 24, 2015). In its brief opposing

Spicklemire’s motion for summary judgment, KLR asserted that those costs

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 14 of 26 were recoverable under various common-law theories. This was the first time

that KLR mentioned common-law remedies, or indeed described this lawsuit in

terms other than an ELA action. This was approximately ten years after the

onset of this litigation. Nevertheless, KLR contends these issues were tried by

consent because the second amended complaint pleaded operative facts

sufficient to support claims for lost rent and reduced property value, i.e., “these

substances were deposited in the soil and groundwater during the Defendant’s

ownership and/or operations at the Site and remained there after the

Defendants ceased ownership and/or operation at the Site and continue to

cause property damage.” Appellant’s Appendix at 59.

[23] We first observe that the foregoing language cannot be deemed to have

expressly presented the common-law claims in question. Not only are the

concepts of “lost rent” and “loss of use” not pleaded with specificity, but the

reference to continuing property damage is made in a complaint identified

explicitly as an ELA action. This leaves only the possibility that the common-

law claims were tried by implied consent of the parties, which is the main thrust

of KLR’s argument on this point.

[24] Trial Rule 15 (B) provides: “[w]hen issues not raised by the pleadings are tried

by express or implied consent of the parties, they shall be treated in all respects

as if they had been raised in the pleadings.” Generally, we consider two factors

when determining whether a party has impliedly consented to a non-pleaded

issue at trial. First, did the opposing party have notice of the issue? Second, did

the opposing party object to the issue being litigated at trial? Mercantile Nat’l

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 15 of 26 Bank of Ind. v. First Builders of Ind., Inc., 774 N.E.2d 488 (Ind. 2002). Our

Supreme Court has stated, “[i]f the opposing party both had notice and failed to

object at trial, then that party will have impliedly consented to the non-pleaded

issue at trial.” Id. at 492-93. Both elements must be met in order for a party to

be deemed to have impliedly consented to a non-pleaded issue. See id. at 493

(“[w]e find that Owner validly objected to the personal liability issue being

litigated, and although Owner had notice of this issue, Owner did not impliedly

consent to it being litigated within the meaning of Trial Rule 15(B)”).

[25] Even assuming Spicklemire had notice of the common-law claims, his objection

to the presentation of those claims when denominated as such for the first time

in Plaintiff’s Preliminary Contentions constituted a valid objection to those

issues being litigated. Therefore, Spicklemire did not impliedly consent to

litigating those issues at trial within the meaning of T.R. 15(B). The trial court

did not err in granting summary judgment in favor of Spicklemire on KLR’s

common-law claims.

3.

[26] KLR contends the trial court erred in dismissing its complaint pursuant to Trial

Rule 41(B) on grounds that KLR failed to present sufficient evidence to show

Spicklemire caused or contributed to chlorinated solvent and petroleum

hydrocarbon contamination of the Site.

[27] When reviewing a ruling on a T.R. 41(B) motion to dismiss, we apply the

following standard of review:

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 16 of 26 The grant or denial of a motion to dismiss made under Trial Rule 41(B) is reviewed under the clearly erroneous standard. In reviewing a motion for involuntary dismissal, this court will not reweigh the evidence or judge the credibility of the witnesses. We will reverse the trial court only if the evidence is not conflicting and points unerringly to a conclusion different from the one reached by the lower court. Todd v. State, 900 N.E.2d 776, 778 (Ind. Ct. App. 2009) (quoting Thornton–

Tomasetti Eng’rs v. Indianapolis–Marion Cnty. Pub. Library, 851 N.E.2d 1269,

1277 (Ind. Ct. App. 2006)).

[28] In this particular case, in granting Spicklemire’s T.R. 41(B) motion, the trial

court ruled that KLR failed to establish a viable ELA claim. In order to

establish such a case, KLR was required to prove that Spicklemire “caused or

contributed to the release of a hazardous substance or petroleum into the

surface or subsurface soil or groundwater that poses a risk to human health and

the environment.” I.C. § 13-30-9-2. The parties stipulated before trial that

“chlorinated solvents and petroleum hydrocarbons [had] been detected in the

soil and groundwater at the Site.” Appellant’s Appendix at 45. Thus, in order to

prevail, or, as the case may be, survive a T.R. 41(B) motion to dismiss, KLR

was required to offer evidence that Spicklemire caused or contributed to the

release of chlorinated solvents and petroleum hydrocarbons in the soil and

groundwater at the Site.

[29] KLR contends that it did present such evidence, and further that the trial court’s

conclusion to the contrary is a result of the court applying the wrong legal

standard. According to KLR, “[t]he ELA does not require a person who cleans

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 17 of 26 up a contaminated property to prove specific contaminating incidents with

direct evidence.” Appellant’s Brief at 12. Rather, according to KLR, it is enough

“to show with direct or circumstantial evidence that the defendant more likely

than not ‘had some involvement with the contaminants at issue’ or ‘helped

bring about’ contamination of the property.” Id. (citing Reed v. Reid, 980

N.E.2d 277, 289 (Ind. 2012), Gary v. Schafer 683 F. Supp.2d 836, 855 (N.D. Ind.

2010), and Neal v. Cure, 937 N.E. 1227, 1234 (Ind. Ct. App. 2010), trans.

denied)). KLR urges that “[e]ven if [Spicklemire] only helped spread

contamination others put at the Site or contributed to one-half of 1 % of the

contamination at the Site, he is liable under the ELA.” Id. at 12-13. KLR

claims that it presented evidence that Spicklemire contributed to a release of the

contaminants by having some involvement with the contaminants. In essence

KLR contends that Spicklemire helped spread the contaminants that were

brought to and released onto the Site by others. As KLR phrases it, “it is

against the logic and effect of the evidence presented at trial to hold that

Spicklemire’s 26 years of unlawful, chemical-laden operations and heavy daily

discharges at the Site had absolutely no effect on the Site.” Id. at 13.

[30] The standard to be applied in ELA cases alleging that a party “caused or

contributed” to environmental contamination of the sort covered by the ELA

was addressed by this court as follows:

The phrase “caused or contributed” is not defined by statute, and we must give those words their plain and ordinary meaning. “Each term of the phrase ‘caused or contributed’ requires some involvement by the actor which produces a result.” Standard

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 18 of 26 English dictionaries may also be consulted in determining the meaning of this phrase. A standard dictionary definition of “cause” is “‘a person, thing, fact, or condition that brings about an effect or that produces or calls forth a resultant action or state.’” “Among other things, ‘contribute’ means ‘to act as a determining factor; share responsibility for something.’” Our goal when construing the phrase “cause or contribute” should be to hold accountable all parties “responsible for creating environmental contaminations.” JDN Props., LLC v. VanMeter Enters., Inc., 17 N.E.3d 357, 360-61 (Ind. Ct. App.

2014) (internal citations omitted). Therefore, KLR is correct in that “caused or

contributed” in this context requires proof that the defendant was in some way

involved in the contamination of the property in question.

[31] In Neal v. Cure, 937 N.E.2d at 1234, the definition of “caused or contributed”

was further refined for our particular purposes, i.e., in determining the liability

of a landlord under the ELA. In Neal, the plaintiff sued a landlord under the

ELA for contamination caused by its tenant. The landlord submitted a motion

for summary judgment, arguing that it was not responsible for the

contamination, nor was it aware that the contamination was occurring or had

occurred. On appeal, the plaintiff argued only that the evidence demonstrated

that the landlord “contributed” to (versus “caused”) the contamination. The

trial court granted the motion upon its conclusion that the plaintiffs had

presented no evidence demonstrating an affirmative act on the part of the

landlord that caused or contributed to the contamination. The court further

concluded, “any alleged inaction on the part of [the landlord] … cannot form

the basis for determining that the [landlord] caused or contributed to the

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 19 of 26 contamination.” Id. at 1233. The court on appeal thus undertook to determine

the meaning of “contributed” in this context and concluded that “the plain

language of the statute does not permit an ELA action against landlords who

‘by all accounts were not involved in the alleged release of hazardous

substances and had no knowledge of the release.’” Id. at 1235 (quoting City of

Martinsville v. Masterwear Corp., 2006 WL 2710628, slip op. at 4 (S.D. Ind.

2006)).

[32] In the present case, the parties stipulated that Demaree was responsible for the

chlorinated solvent and petroleum hydrocarbon contamination at the Site. The

court found that subsequent purchaser Spicklemire had no involvement in the

day-to-day operations of Filmcraft’s subtenants, i.e., the Detailers, nor did he

have knowledge regarding whether those subtenants used chemicals in their

operations. Moreover, there was no evidence that the Detailers used any

chlorinated solvents or petroleum hydrocarbons in their operations. Therefore,

the evidence supported the determination that Spicklemire was not liable by

virtue of his status as landlord vis-à-vis the Detailers and their operations on the

[33] As for liability by virtue of Filmcraft’s own activities, the direct evidence

indicated that, with but one very minor exception, its operations did not involve

the use of chlorinated solvents or petroleum hydrocarbons. The exception

involved the use of a single tube of white grease – about three to four inches in

size – which contained petroleum hydrocarbon. That single tube was used so

sparingly that it lasted the entire time Filmcraft was in operation. This supports

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 20 of 26 the trial court’s finding that Filmcraft’s operations did not contribute to the

petroleum hydrocarbon or chlorinated solvent contamination on the Site.

[34] We note also that sometime around 1980, Filmcraft purchased a fifty-five-

gallon drum of photographic lacquer. Filmcraft also purchased four one-gallon

cans of lacquer. None of these containers were ever used, or apparently even

opened, because Filmcraft did not have enough lacquer orders to justify it. The

full fifty-five-gallon drum was found during Patriot’s chemical

decommissioning, and was described by Patriot as sealed and not leaking.

Patriot properly disposed of it. The evidence also showed that Filmcraft used

small cans of aerosol lacquer, which was applied to photographs in a ventilated

booth. Overspray ended up on the pegboard used to hold the photographs at

the time, or was vented out of the building through an exhaust fan. Filmcraft

used approximately one can (about the size of a can of spray paint) per month.

This evidence supports the trial court’s finding that Filmcraft’s operations did

not contribute to the petroleum hydrocarbon or chlorinated solvent

contamination on the Site.

[35] Those chemicals that Filmcraft did use were heavily diluted with water, and

effluent from the photo-processing operations was discharged into a trench

drain that led to city sewers. Zabonick testified that the photo-processing

effluent did not contain chlorinated solvents or petroleum hydrocarbons, and

that discharge of photo-processing effluent to the trench did not cause

contamination at the Site. The effluent did contain silver, but not in amounts

above regulatory action levels in the soil or groundwater. A test of the soil

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 21 of 26 around the drain did not reveal the presence of silver in the soil. Moreover, we

must bear in mind that this testing of the drain and sewer lines occurred in

2013, which was fully twelve or thirteen years after Filmcraft ceased operations

on the Site. Again, this evidence supports the trial court’s finding that

Filmcraft’s operations did not actively contribute to the petroleum hydrocarbon

or chlorinated solvent contamination on the Site.

[36] We understand that the gist of KLR’s argument is that the trial court applied an

impossibly high standard in determining whether KLR had proven its case

under the ELA. According to KLR, “the ‘contributed’ element of the ELA

should not be interpreted to require an ELA plaintiff to produce direct evidence

that the defendants released specific contaminants on specific dates, which

caused the contamination driving the remediation decades later.” Appellant’s

Brief at 8. It seems that KLR reads into the court’s findings and conclusions the

view that, in order to prevail under the ELA, KLR was required to present

evidence that on a specific date Spicklemire contributed to the release of a

particular contaminant into the soil or groundwater. We do not interpret the

trial court’s findings and conclusions to convey such an exacting standard.

[37] For purposes of this litigation, the important dates were those dates for which

KLR could establish that Spicklemire was present on the Site, or had

knowledge of or bore some responsibility for what was occurring on the Site.

KLR adduced such evidence, establishing the date range of Spicklemire’s

ownership of the Site, the date range of Filmcraft’s operations, and the date

range of the operations of the subtenants, i.e., the Detailers. It was then up to

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 22 of 26 KLR to present evidence linking Spicklemire to the particular contaminants

discovered to be present at the Site via the inspections performed by Keramida

in 2002 and Terra in 2013, i.e., chlorinated solvents or petroleum hydrocarbons.

As explained above, KLR’s evidence did not establish that Filmcraft used

products containing those contaminants in its operations, nor did Filmcraft’s

subtenants, the Detailers.

[38] KLR points to the testimony of its expert, Zabonick, to the effect that “the

historical operations of the Site have contributed to the contamination present

at the Site.” Transcript at 854. He went on to include Filmcraft as a contributor

to that contamination on grounds that some of the chemicals used in the film

processing operation “more likely than not would have contributed to the

contamination or cause some additional contamination.” Id. at 855. Yet,

Zabonick also testified on this subject as follows:

Q Now, let’s talk about your opinion that Filmcraft’s photo and film processing operations contributed to the contamination at the site. You understand that Filmcraft used chemicals to develop film and photographs, correct? A Correct. Q You understand that these chemicals included developers, fixes, bleaches, as well as some other -- as well as water, correct? A Correct. Q You also understand that Filmcraft used a variety of machines when they developed film and photographs, correct? A Correct.

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 23 of 26 Q But it’s not your opinion that day-to-day effluent or discharge from these machines contained any chlorinated solvents or petroleum hydrocarbons, is it? A That would be correct. Q In fact, you agreed with me that introducing chlorinated solvents would be detrimental to that photographic or film processing, didn’t you? A I believe so. Q So rather you believe that Filmcraft may have conducted other activities at the site that contributed to that -- to the petroleum hydrocarbon and chlorinated solvent contamination, correct? A By “contributed to”, are you meaning adding additional chlorinated and petroleum hydrocarbons or contributing to the migration of the existing contamination? Q Let’s stick with your old opinion. Just contributing to the chlorinated solvent and petroleum hydrocarbon contamination at the site and then we’ll talk about this migration. A Okay. Can you ask the question again, please. Q So you believe that Filmcraft conducted some other activities at the site other than discharging effluent that added something to the petroleum hydrocarbon and chlorinated solvent contamination at the site, correct? A Yes. Q And you believe these activities could have included cleaning the film and the developing equipment, is that right? A That’s correct. Q Even though you have no knowledge of whether or not they used chlorinated solvents or petroleum hydrocarbons in that process?

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 24 of 26 A That’s correct. Q You also believe that these activities could have included cleaning film, correct? A Correct. Q What film cleaners did the photo processing, the photo and film processing operations use? A This specific operation? Q Yes. A I have no knowledge of any specific cleaners that they would have used. Q So you don’t know the company that manufactured it, correct? A That would be correct. Q You don’t know the chemical that they supplied, correct? A That would be correct. Q You don’t know how Filmcraft may have used that chemical, is that correct? A That would be correct. Q How do you know that these operations could have contributed? A I guess I’m not sure – [.] Transcript at 940-43. In light of this testimony, among other things, Zabonick’s

opinion as to Spicklemire’s responsibility for the contamination was not so

irrefutably supported by the direct and circumstantial evidence presented during

KLR’s case-in-chief that, in rejecting it, the trial court committed clear error.

See Todd v. State, 900 N.E.2d 776. In the end, the evidence cited by KLR as

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 25 of 26 crossing the minimum threshold4 is just too speculative to mandate a different

result. We cannot say that the evidence pertaining to whether Spicklemire

caused or contributed to contamination at the Site is non-conflicting and points

unerringly to a conclusion different from the one reached by the trial court. See

id.

[39] Judgment affirmed.

Kirsch, J., and Crone, J., concur.

4 E.g. “The contaminants found at the Site are consistent with some of the petroleum hydrocarbons and chlorinated solvents typically used by photo processors during Filmcraft’s operations.” Appellant’s Brief at 5 (emphasis supplied).

Court of Appeals of Indiana | Opinion 49A02-1403-CT-188 |April 14, 2015 Page 26 of 26