Bardon Trimount, Inc. v. Guyott

732 N.E.2d 916, 49 Mass. App. Ct. 764, 2000 Mass. App. LEXIS 621
CourtMassachusetts Appeals Court
DecidedAugust 1, 2000
DocketNo. 98-P-1134
StatusPublished
Cited by13 cases

This text of 732 N.E.2d 916 (Bardon Trimount, Inc. v. Guyott) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bardon Trimount, Inc. v. Guyott, 732 N.E.2d 916, 49 Mass. App. Ct. 764, 2000 Mass. App. LEXIS 621 (Mass. Ct. App. 2000).

Opinion

Kaplan, J.

Bardon Group PLC entered into a contract, closing [765]*765date May 4, 1988, with the shareholders of Guyott Company by which it purchased each and all their shares for a total base price of $100 million, and thereby acquired ownership of the Guyott Company properties. That company had been primarily in the business of supplying crushed stone, bituminous concrete, and liquid asphalt, and among its properties were eleven parcels of land, several of which were the subjects of environmental disputes stemming from alleged pollution of the sites. As the costs to be incurred in dealing with and liquidating the claims were in many respects inchoate and could not be accurately forecast, the shares purchase agreement set out rather elaborate terms for notices from Bardon Group PLC to the shareholders about the accrual of such costs and their payment divided between the two sides.

The shareholders have asserted that they are free of the duty to pay any amount now or in the future because of the alleged failure of Bardon Trimount, Inc. (Bardon), assignee of Bardon Group PLC, to furnish them with periodic notices regarding the environmental costs that complied with the terms of the agreement. The present action was by Bardon in Superior Court against the shareholders2 for breach of contract in failing to reimburse Bardon for their agreed portion of payments already made by Bardon, and for a declaration of their continuing duty under the agreement. The shareholders entered denials of the breach and counterclaimed for a declaration in their favor. Both sides made further allegations pursuant to the consumer protection act, G. L. c. 93A.

Upon a voluminous documentary record, the parties cross-moved for summary judgment. The judge dismissed the shareholders’ c. 93A claim, but entered judgment for them on all counts of Bardon’s complaint, entered the declaratory judgment sought by the shareholders, and awarded them $200,677.18 in attorney’s fees as the prevailing parties, pursuant to a provision of the contract. The plaintiff, Bardon, appeals. We shall in effect affirm in part and reverse in part. Neither side appeals from the denial of c. 93A relief.3

Environmental Costs

A. Sites. We begin with the sites in question. Schedule 3.19 [766]*766of the agreement identifies these, indicating the status of any ongoing litigation or regulatory proceedings.

(1) Groveland wells. State and Federal actions were pending initiated by the town of Groveland against companies unrelated to Bardon, alleging that they had caused town drinking water wells to be polluted. Those defendants made a Guyott subsidiary4 a third-party defendant in these actions, alleging that the source of the problem was the subsidiary’s property in Haverhill, specifically a 75-acre municipal landfill the subsidiary was leasing to the city of Haverhill.

(2) Haverhill site. The Haverhill landfill just mentioned was, at the time of the shares purchase agreement, under a closure program begun in 1981 in settlement of a Superior Court action brought by the Massachusetts Department of Environmental Quality Engineering (DEQE) under the Oil and Hazardous Material Release Prevention and Response Act, G. L. c. 21E. In 1984, the United States Environmental Protection Agency (EPA) had placed the site on the national priorities list of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 et seq., commonly known as the “Superfund” law. At the time of the shares purchase agreement, EPA was still in the process of identifying potentially responsible parties (PRPs)5 ; at some later date it would enter into negotiations about conducting a Remedial Investigation and Feasibility Study (RI/FS) of the site. In a financial statement annexed to the agreement, Guyott Company stated that placement on the national priorities list [767]*767was for “those sites within the United States that potentially pose the most serious threats to the environment,” and “[s]ince these matters relating to the Haverhill landfill are in preliminary stages neither management nor counsel can predict their final outcome.”

(3) Ashland site. A Guyott Company subsidiary had been named as a defendant in a Superior Court action by the town of Ashland alleging the company’s property, a 97-acre quarry site, was releasing hazardous waste into adjacent town property and threatening a proposed town well with contamination. The DEQE had sent the subsidiary a notice of responsibility pursuant to G. L. c. 21E, referring to the release of waste and directing the subsidiary to conduct an investigation for purposes of remediation.

(4) Shrewsbury site. A Guyott Company subsidiary was on notice that its eleven acres in Shrewsbury containing its bituminous concrete plant might be contaminated and subject to G. L. c. 21E.

(5) Other properties. Schedule 3.19 has a catch-all provision: “From time to time prior to [the agreement] various polluting substances and wastes, including without limitation petroleum products, some one or more of which substances and waste are now classified as hazardous and/or toxic, have been released, discharged and/or disposed of on property now or formerly owned or occupied by [the Guyott Company or its subsidiaries] "

B. Section 5.12 of Shares Purchase Agreement. The expenses of dealing with these environmental matters were the subject of section 5.12 (see text in Appendix) by which the shareholders agreed to share the costs in excess of $1 million equally with Bardon.

The substance of section 5.12 is as follows. In general, the shareholders agreed to pay half of all “Environmental Costs” exceeding $1 million for cleaning up the sites. These costs are by definition limited to such as are “reasonably identified” and “reasonably quantified either by reference to an amount or a range of possible exposures through investigation or negotiation with third parties or the like.” The language indicates that, where costs are not precisely known and have not yet been incurred, a reasonable estimate of future costs by a third party may satisfy the definition.

The shareholders’ agreement to pay is “subject to” Bardon’s [768]*768providing them with prescribed forms of notice within certain time limits. First, when costs of $1 million have arisen, Bardon must send “verification” of that fact along with a description of the costs in “reasonable detail, including the payees or expected payees.” Similarly, Bardon must provide written “notice” of costs over the $1 million threshold, and must describe them in “reasonable detail, including the payees or expected payees.” Regarding non-Haverhill sites, the shareholders are liable only for costs as to which such notice was given by Bardon within two years of the closing date. A clause similarly excuses the shareholders from Haverhill-related costs, except that the notice period is five years. Actual payment by the shareholders becomes due when Bardon submits to the shareholders “evidence” that a cost, of which timely notice was previously given, has actually “been paid or is due and payable.” Unlike the case as to Bardon’s giving “notice,” the agreement sets no time limit for Bardon’s submission of its “evidence” of payment.

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Cite This Page — Counsel Stack

Bluebook (online)
732 N.E.2d 916, 49 Mass. App. Ct. 764, 2000 Mass. App. LEXIS 621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bardon-trimount-inc-v-guyott-massappct-2000.