Carter-Jones Lumber Co. v. Dixie Distributing Co.

166 F.3d 840, 1999 WL 41044
CourtCourt of Appeals for the Sixth Circuit
DecidedFebruary 2, 1999
DocketNos. 97-3422, 97-3709
StatusPublished
Cited by16 cases

This text of 166 F.3d 840 (Carter-Jones Lumber Co. v. Dixie Distributing Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carter-Jones Lumber Co. v. Dixie Distributing Co., 166 F.3d 840, 1999 WL 41044 (6th Cir. 1999).

Opinion

OPINION

SILER, Circuit Judge. '

The district court found defendants, Dixie Distributing and Harry C. Denune, Dixie’s 100% shareholder, severally liable under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, 42 U.S.C. § 9601 et seq., as arrangers for the disposal of hazardous waste. That waste had contaminated land owned by plaintiff, Carter-Jones Lumber Co., which filed this CERCLA action against Dixie, Denune and other defendants, not parties to this appeal, to recover costs expended in cleanup of the site. Dixie and Denune appealed the judgment. Carter-Jones cross-appealed the decision of the court denying joint and several liability by Dixie and Denure. We AFFIRM in part and REVERSE in part.

I. BACKGROUND:

Carter-Jones initiated this private cost-recovery action against Dixie (an Ohio corporation) and Denune pursuant to § 113 of CERCLA, which governs contribution actions. Carter-Jones sought reimbursement for costs it incurred in removing environmentally hazardous substances from a site in central Ohio.

After trial, the district court found Dixie to be liable for 50% of the response costs, with Denune liable for 30% of the response costs, recoverable' by Carter-Jones as a claim for contribution under 42 U.S.C. § 9613(f). The district court initially found them to be jointly and severally liable, but upon petition for reconsideration, it amended its order to make them severally liable only.

In October 1985, Dixie and Denune purchased from Federal Paper Board Company ten transformers containing polychlorinated biphenyls (“PCBs”) and six regulators for a total price of $1,000.00. Denune signed an affidavit at the time of sale acknowledging the problem with PCB disposal and apparently negotiated thé purchase of the transformers. At the time of purchase, Dixie obtained a report from Federal Paper of a recent inspection of the transformers which indicated that they were not leaking. The transformers were later moved to real estate owned by Denune. Three were sold to an individual named Abe Hoosharnejad in Columbus and were later destroyed by fire, [844]*844according to the testimony of Denune, while the remaining seven transformers were moved to a building in Springfield, Ohio in the spring of 1986.

In June 1987, Dixie sold the seven transformers to Top Dollar Liquidators for $700.00. James Henderson signed (or seems to have signed, although there is conflicting evidence on this point) an affidavit on behalf of Top Dollar acknowledging the problem of PCB disposal. Only four of those transformers were moved by Top Dollar to a facility in Columbus. They were moved without a permit in an overweight truck illegally at night so as to be undetected by the authorities. Woody Underwood, affiliated with Top Dollar, was present when the transformers were sold to Top Dollar and stated that Henderson and Denune were entering into an arrangement to hide the transformers from the Ohio Environmental Protection Agency (“OEPA”).

In September 1987, Denune sold to Tracy Westfall three of the seven transformers which he had already sold to Top Dollar and James Henderson. Denune alleges that Westfall signed an affidavit acknowledging the problem of PCB disposal, but Westfall denied even signing the affidavit. Both Henderson and Westfall were in the salvage liquidation business. According to Henderson, the trailer containing Top Dollar’s four transformers remained locked and stationary at the Hendron Road property, the property involved in the cleanup here, for approximately one year.

In July 1988, Stephen Rumich notified the OEPA in a citizen complaint that transformers were being destroyed, or “scrapped,” according to employees at the Hendron Road property, and that oil was leaking onto the ground. The next day, Tom Buchan of the OEPA inspected the site and discovered that four PCB-containing transformers were on the premises in a trailer. Their serial numbers were intact. He discovered that two of the four showed evidence of leakage, although there was no active flow, and that there was extensive leakage of oil on the ground. One transformer was damaged by something other than deterioration, and Henderson told Buchan that the spill was caused by an employee who opened a valve on a transformer. Buchan also testified that additional drums contaminated with PCBs were on the trailer.

Buchan traced the four transformers to Federal Paper, which informed him that, in 1985, it sold ten transformers to Denune and Dixie. Then, in October 1988, Buchan inspected Dixie’s Columbus facility and arranged to inspect the Springfield facility in November. Two hours before the inspection at Springfield in 1988, a truck left that property and drove to a location in Butler County known as Canal Auto. The truck was found to contain five PCB transformers with the tops removed, as well as other contaminated items such as paint solvents and PCB-laden capacitors. Denune had previously told Bu-chan that he only had two PCB transformers. A cleanup then began at the Canal Auto site and was paid for by Dixie and Denune.

After that cleanup, the OEPA attempted to have the Hendron Road site cleaned through contacts with Henderson, Michael Walcutt, and Dean Walcutt, who had negotiated an option to purchase the property from Carter-Jones. A contingency to the purchase was Walcutt’s cleanup of the property. In May 1989, Dean Walcutt decided not to exercise the option on the property, but he did not notify Carter-Jones. While the transformers were at the Hendron Road property, Denune personally checked on them on at least two occasions. Also in May 1989, the trailer containing the four transformers was taken from the Hendron Road property on a day when both Henderson and Westfall were on the premises. The four transformers were later found on property in Columbus which was owned by Denune and leased by Westfall. Westfall testified that Denune arranged for the delivery of the transformers to that property. When the transformers were found in Columbus, the identifying serial numbers had been removed and they were in various stages of destruction. That same month the OEPA arrived at the Columbus site, and Defendant Denune was ordered to clean up the site.

In July 1990, Carter-Jones entered into a Consent Order to clean up at the Hendron Road property, and it ultimately incurred cleanup costs of over $3 million.

[845]*845At all times relevant to the liability issues in this ease, Denune was president, chief executive officer, and the only shareholder of Dixie. He ceased to be president and CEO in 1989, but remains the sole owner of Dixie. He denies that he was involved in Dixie’s illegal disposal practices, arguing that he was but one of twenty-one employees of Dixie. He has not, however, presented any evidence to show that any other Dixie employee had responsibility for waste disposal practices. Denune is the representative of Dixie who purchased and sold the transformers and who signed the affidavit relating to PCB hazards on Dixie’s behalf at the time the transformers were first purchased.

II. DISCUSSION:

A Arranging for the disposal of hazardous substances.

Under CERCLA, any person who has “otherwise arranged for disposal” of hazardous substances is liable for response costs. 42 U.S.C.

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Bluebook (online)
166 F.3d 840, 1999 WL 41044, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carter-jones-lumber-co-v-dixie-distributing-co-ca6-1999.