Gopher Oil Co. v. Union Oil Co. of California

955 F.2d 519, 1992 WL 11201
CourtCourt of Appeals for the Eighth Circuit
DecidedJanuary 28, 1992
DocketNos. 91-1159, 91-1430, 91-1854
StatusPublished
Cited by9 cases

This text of 955 F.2d 519 (Gopher Oil Co. v. Union Oil Co. of California) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gopher Oil Co. v. Union Oil Co. of California, 955 F.2d 519, 1992 WL 11201 (8th Cir. 1992).

Opinion

BRIGHT, Senior Circuit Judge.

These appeals arise from an action brought by Gopher Oil Company (Gopher) to recover damages, environmental cleanup costs and attorney fees from the defendant [522]*522Union Oil Company of California (Union) based on common law fraud under Minnesota state law, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, §§ 107, 113, 42 U.S.C. §§ 9607, 9613 (1988) and the Minnesota Environmental Response and Liability Act (MERLA), Minn.Stat. §§ 115B.04, 115B.08 (1991).1

After a trial by jury and the adoption and modification of the jury verdict, which the trial judge considered as advisory, on the MERLA and CERCLA claims, the district court entered the following orders and judgments:

1. Order and judgment, under Fed.R.Civ.P. 54(b), dated November 20, 1990 that Gopher recover cleanup costs in the sum of $423,272.81 plus prejudgment interest ($93,572.34) and postjudgment interest ($4,794.00) against Union: declaring Union further liable for 100% of necessary response and removal costs and retaining jurisdiction over the fraud claim for future determination of damages after substantial cleanup of the site.

2. Order dated February 19,1991 granting attorney fees and other expenses to Gopher, under CERCLA and MERLA, in the sum of $559,380.52. That order also:

a) provided for denial of Union’s motion for a new trial.

b) granted Gopher’s motion for a 28 U.S.C. § 1292(b) (1988) certification for interlocutory appeal of that part of the judgment retaining jurisdiction to award future damages on the fraud claim, rather than entering total damages pursuant to the jury’s verdict.

Union appeals from the damage award, the attorney fee award and the declaration of 100% liability against Union (Case Nos. 91-1159 and 91-1430).

Gopher appeals under 28 U.S.C. § 1292(b), with the permission of this court, contesting the trial court’s deferral in awarding final judgment on the fraud claim (Case No. 91-1854).

We have appellate jurisdiction over Union’s appeals under 28 U.S.C. § 1291 (1988), as appeals from final orders and judgments. We have jurisdiction over Gopher’s appeal under 28 U.S.C. § 1292(b). Federal jurisdiction over plaintiff’s claims rests on 28 U.S.C. § 1332 (diversity of citizenship), 28 U.S.C. § 1331 (federal question) and 42 U.S.C. § 9613 (CERCLA).

On these appeals, Union challenges: (1) the district court’s denial of Union’s motion for a new trial on the fraud issue, alleging erroneous jury instructions and lack of evi-dentiary support for the jury verdict; (2) the district court’s order holding Union one-hundred percent responsible for cleanup costs under both CERCLA and MERLA; and (3) the district court’s award of attorney fees to Gopher.

Gopher asserts error in the trial court’s refusal to award Gopher full damages on the fraud claim pursuant to the jury verdict.

We affirm on all appeals, but remand for reconsideration of attorney fees and suggest calculation of fraud damages as expeditiously as possible.

I. BACKGROUND

From the early 1900s to 1980, W.H. Barber Company (Barber) owned and operated a bulk oil and chemical facility on a five-acre site located in Minneapolis, Minnesota. Barber operated as a subsidiary of the Pure Oil Company (Pure Oil). Upon the merger of Pure Oil and Union in 1965, Barber became a wholly-owned subsidiary of Union. Barber primarily blended petroleum products and packaged them for resale. From the early 1960s to 1980, American Mineral Spirits Company (AMSCO), a division of Union, shared the site with Barber and utilized Barber employees for the blending and packaging of industrial chemicals.

Prior to 1980, the Barber and AMSCO operations resulted in numerous leaks, spills and intentional dumpings of oil and industrial chemicals. In preparing the Barber site for sale, Union took steps to conceal the evidence of years of accumulated [523]*523deposits of oil and chemicals on the site. .It removed contaminated ground and replaced it with landscaping gravel. Other contaminated areas were simply covered over with the gravel.

Gopher, a Minnesota petroleum products processing company, expressed an interest in purchasing the site in late 1980. Union representatives informed Gopher of a 1977 spill of 10,000 gallons of turpentine and another spill of approximately 300 gallons of lubricating oil. Union did not inform Gopher that Barber and AMSCO’s normal operating procedures, particularly prior to 1970, resulted in continual minor leaks and dumpings on the site. Further, Gopher asserts that Union assured Gopher on three occasions that no pollution problems existed with the site. A Union internal memorandum, however, noted the need for pollution control and recommended sale of the site rather than a substantial investment in environmental and safety concerns.

Gopher knew of a September 1980 letter, addressed to Barber, containing a request from the City of Minneapolis that Barber conduct soil borings on the site in relation to the 1977 turpentine spill. Union representatives suggested that the request resulted from political pressure. Gopher was able to have the request revoked.

Representatives of Gopher visited the site twice before the purchase and during a guided tour viewed the storage tanks, buildings and a tunnel. They noticed some minor soil discoloration from oil spills, but gravel obscured much of the contaminated ground and any chemical spills would have been primarily colorless. Gopher had free access to Union’s records for investigation, but did not utilize the opportunity.

Fred Bame (Bame), president of Gopher, contacted officials from the Minnesota Department of Inspections and the Minnesota Pollution Control Authority (MPCA) to inquire about any pollution problems at the site. These officials informed Bame about the two major spills and the tunnel filled with oil-contaminated water. They did not indicate any other major problems with the site.

Gopher completed the purchase in November of 1980. The purchase agreement contained a clause purporting to transfer the land and facilities in an “as is” condition2 and a clause stating that none of the warranties made in the agreement contained any untrue statement of material facts or omitted any material fact, the omission of which would be misleading.3 At the time of closure, CERCLA was not in force and CERCLA liability could not have been contemplated by either party.

After the sale, Gopher fixed up the plant and replaced leaky valves and tanks.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
955 F.2d 519, 1992 WL 11201, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gopher-oil-co-v-union-oil-co-of-california-ca8-1992.