Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch

389 S.W.3d 583, 2012 WL 5533359, 2012 Tex. App. LEXIS 9457
Court of Appeals of Texas·Decided November 15, 2012·No. 14-10-01006-CV·Published·Cited by 6 cases

Opinions

OPINION

CHARLES W. SEYMORE, Justice.

Appellant, Houston Unlimited, Inc. Metal Processing (“HUI”), appeals a judgment in favor of appellee, Mel Acres Ranch (“Mel Acres”), on its negligence claim based on HUI’s alleged environmental contamination of real property owned by Mel Acres. In three issues, HUI contends Mel Acres failed to obtain an essential jury finding of permanent injury to the property and the evidence is legally and factually insufficient to support a finding that HUI negligently caused permanent injury to the property, as required to support the damages requested by Mel Acres. We affirm.

I. Background

HUI operates a metal-processing facility in Washington County, Texas. Mel Acres’s property is undeveloped ranchland located across Highway 290 from HUI’s facility. A culvert flows downhill from HUI’s facility, under the highway, and into a stock tank (“the large pond”) on Mel Acres’s property. Mel Acres’s property also contains two “background” ponds, which undisputedly are not hydraulically connected to HUI’s property and could not have been affected by HUI’s activities.

In late 2007, Mel Acres’s lessee, a cattle rancher, complained that a number of its calves had died or experienced various defects. Additionally, someone associated with the lessee had observed an HUI employee “dumping” the contents of a large drum into the culvert and that pipes were discharging materials from HUI’s process building. Mel Acres retained an environmental consultant, Geo Strata, whose testing of water samples in December 2007 revealed arsenic, chromium, copper, nickel, and zinc exceeding state action levels in the culvert and copper exceeding state action levels in the large pond.

In December 2007, Mel Acres lodged a complaint -with Texas Commission on Environmental Quality (“TCEQ”). On January 2, 2008, David Mann and another inspector from TCEQ made an unannounced visit to HUI’s facility and met with Leonard Poen-itzseh, its general manager. Mann testified HUI was a “registered large quantity generator,” meaning it was permitted to generate hazardous waste in amounts greater than 1,000 kilograms per month but was required to comply with state environmental regulations for discharge of that waste. However, HUI was in violation of applicable regulations at the time of TCEQ’s visit because HUI failed to (1) have a storm water permit, (2) implement a “Storm Water Prevention Pollution Plan,” to regulate materials that might emanate from the facility via rainwater, (3) maintain updated registration information, (4) implement a “Source Reduction and Waste Minimization Plan,” and (5) maintain the required employee-training program relative to disposal of hazardous wastes.

At trial, Poenitzsch made several admissions regarding HUI’s practices before the TCEQ visit: (1) for twenty-five years, HUI had disposed of spent blast media (a substance containing bead-like particles used to clean metal and prepare it for further treatment) and other processing materials behind the facility and used it for fill material; (2) HUI did not have any written environmental policy; (3) except for a two-year period during the 1990s, [586]*586HUI had no environmental consultant or employee with environmental training to ensure compliance with state law; and (4) Poenitzsch could not substantiate his claim that, for twenty-five years, HUI had properly disposed of “evaporator solids” and “nitriding solids,” containing contaminants, in landfills. Poenitzsch agreed “to some extent” with the opinion of HUI’s own expert that HUI did not understand the complexities of TCEQ waste regulations.

Mann observed that the area between HUI’s process building and the culvert was “crusted over” with white and dark brown sediment, which was soft and moist despite no recent rain. The culvert area contained water with a milky appearance while other pooled water in the culvert had a dark-brown appearance. During the visit, Poenitzsch acknowledged that HUI employees emptied 55-gallon containers of process material onto the ground behind the building on a daily basis, and he pointed out a discharge pipe coming from the building. Poenitzsch told the investigators the milky water contained dissolved oil and the brown water contained spent blast media.

It appeared to Mann that significant discharge had occurred although he was not sure of the duration, and he was “rather surprisefed] to see the amount of waste associated with the discharge.” Further, Mann noticed that there was no berm or other structure, as required, to prevent water containing spent blast media and other processing materials from flowing off-site during rain events. Mann personally observed water flowing from HUI’s facility under the highway, through the culvert. The investigators informed Poen-itzsch that HUI was illegally discharging industrial waste into and adjacent to state waters and instructed HUI to immediately cease this activity.

During the January visit, TCEQ obtained soil and water samples, both on-site and off-site, and testing for certain “constituents of concern” yielded the following results:

On-site at the HUI facility — in the culvert area behind the process building: surface water sampling revealed chromium, copper, lead, nickel, and zinc exceeding state action levels and pH level above 12.5, which is considered “corrosive and hazardous”; and soil sampling reflected aluminum and chromium exceeding state action levels.
Off-site — in the culvert between HUI’s property line and Highway 290: water sampling revealed chromium, copper, aluminum, and zinc exceeding state action levels; soil sampling revealed aluminum exceeding state action levels.
Mel Acres large pond: water sampling reflected copper exceeding state action levels; no soil samples were taken.1

Based on these results, TCEQ concluded that an unauthorized discharge of industrial hazardous waste occurred at the HUI facility and affected Mel Acres’s property. TCEQ formally cited HUI for failure to prevent the discharge of industrial hazardous waste into or adjacent to waters of the state and ordered HUI to cease all discharge activity and initiate clean-up activities. Mann referred the matter to the applicable TCEQ subdivision for an enforcement action, which ultimately resulted in HUI’s payment of a fíne. In the referral, Mann noted that the potentially affected area was the entire Brazos River basin, [587]*587as the ultimate destination of drainage from HUI’s facility. Relative to assessment of the fine, TCEQ concluded HUI did not meet the TCEQ “good faith criteria” because its activity was either negligent or intentional.

Meanwhile, within a week after the TCEQ visit, HUI discovered two pipe leaks of nitriding rinse water, which has a high pH content, in its processing system, replaced the pipes at issue, and installed a secondary containment mechanism in the event of another leak. Additionally, HUI constructed a berm and a dam so that water no longer flowed from HUI’s facility onto Mel Acres’s property and ceased dumping spent materials behind the facility-

TCEQ also required HUI to perform an “Affected Property Assessment Report” (“APAR”) relative to Mel Acres’s property, which Mann explained is required when there has been a discharge onto other property and means TCEQ has already designated the subject property as “affected.” HUI hired Quest Consulting, Inc. to perform the APAR.

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Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch, 389 S.W.3d 583, 2012 WL 5533359, 2012 Tex. App. LEXIS 9457 (Tex. Ct. App. 2012).

389 S.W.3d 583 (Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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