Hydro-Manufacturing, Inc. v. Kayser-Roth Corp.

640 A.2d 950, 39 ERC (BNA) 1236, 1994 R.I. LEXIS 124, 1994 WL 136025
CourtSupreme Court of Rhode Island
DecidedApril 19, 1994
Docket93-96-Appeal
StatusPublished
Cited by111 cases

This text of 640 A.2d 950 (Hydro-Manufacturing, Inc. v. Kayser-Roth Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hydro-Manufacturing, Inc. v. Kayser-Roth Corp., 640 A.2d 950, 39 ERC (BNA) 1236, 1994 R.I. LEXIS 124, 1994 WL 136025 (R.I. 1994).

Opinion

OPINION

LEDERBERG, Justice.

The plaintiff, Hydro-Manufacturing, Inc. (Hydro), appealed to the Supreme Court from an order that granted summary judgment to the defendant, Kayser-Roth Corp. (Kayser-Roth). Hydro had purchased a textile-manufacturing facility located in North Smithfield, Rhode Island (the site). Approximately twelve years before Hydro purchased this facility, the site was contaminated with trichloroethylene (TCE). The property at that time was owned by Stamina Mills, Inc. (Stamina), then a subsidiary of a corporation whose successor is Kayser-Roth. Hydro attempted to recover damages it incurred in the aftermath of the site’s contamination by asserting several causes of action against its predecessor-in-interest, Kayser-Roth. For the reasons herein stated, we hold that, under Rhode Island law, Hydro may not maintain a claim against Kayser-Roth. Rather, in this case, the issues of liability, transfer or release from financial responsibility, and actions for allocation, contribution, and recovery of costs for removal or remedial actions, generally, are actionable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.A. §§ 9601-9675 (West 1983 & Supp. 1993). The facts pertinent to this appeal follow.

FACTS AND PROCEDURAL HISTORY

Since the 1800s a mill building has existed at the site, located north of the Branch River in North Smithfield. Stamina owned and operated a textile-manufacturing facility at the site from 1952 until 1975. In its operations Stamina initially utilized a soap-scouring system to remove dirt and oil from newly woven fabric, but in March 1969, in order to mitigate pollution to the Branch River allegedly caused by the soap-scouring system, Stamina replaced that process with one using TCE. The TCE, however, proved to be no less a contaminant than the soap. Shortly after Stamina began using TCE in 1969, an *953 indeterminate amount of the chemical was accidentally released into the ground when a tanker driver improperly attached a hose coupling to the TCE storage tank on the property.

In 1979 the Rhode Island Department of Health began to investigate contamination in residential wells located north and northwest of the site, and in 1980, the Rhode Island Department of Environmental Management (DEM) issued a report that concluded that the residential wells had been contaminated with TCE that had originated from the site.

The United States Environmental Protection Agency (EPA) conducted a hydrogeological study of the area and, in September 1982, also concluded that the site was the source of the contamination of the well water. The EPA initiated remedial measures at both the site and the residential, off-site wells.

Between the TCE spill in 1969 and the EPA’s study in 1982, the site had twice changed ownership. Stamina, after ending operations at the site in 1975, sold the land in 1976 to Roger Meunier, and in 1977, dissolved its corporate existence. In 1981 Roger Meunier deeded the property to Hydro.

Subsequently, to recover cleanup costs it had incurred, the United States brought suit against Hydro, the current owner of the site, and against Kayser-Roth, the “owner” and “operator” of the site at the time the contamination occurred. United States v. Kayser-Roth Corp., 724 F.Supp. 15, 23-24 (D.R.I.1989), aff 'd, 910 F.2d 24 (1st Cir.1990), cert. denied, 498 U.S. 1084, 111 S.Ct. 957, 112 L.Ed.2d 1045 (1991).

Suit was commenced under CERCLA pursuant to 42 U.S.C.A. § 9607(a) (West Supp. 1993), which provides in pertinent part:

“(1) the owner and operator of * * * a facility [and]
“(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
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“(4) * * * shall be liable for—
(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan.” Hydro, prior to trial, entered into a consent agreement in which, in exchange for release from any further liability, it agreed to transfer title of the site to the government, and to pay property taxes during the cleanup, following which Hydro would assume the expense of procuring a buyer for the site.

Kayser-Roth, having stipulated that TCE is a hazardous material under CERCLA and that a TCE spill had occurred at the site in 1969, nevertheless maintained that it was not liable to the government for the actions of Stamina, and that even if it were liable, the contamination of the wells was not the result of the 1969 spill. Kayser-Roth, however, was classified as “owner” and “operator” of the site for CERCLA purposes within the provisions of § 9607(a) in Kayser-Roth Corp., 724 F.Supp. at 23-24, where the court found “ample evidence to support the fact that once dumped on Stamina Mills’ property the TCE migrated to the Forestdale wells.” Id. at 24. Accordingly, Kayser-Roth was held liable for cleanup costs amounting to $846,492.33 (plus interest) in addition to future response costs for the cleanup both on site and off site. Id. at 24-25.

Within two years of the adverse decision in federal court, Kayser-Roth was again defending a suit stemming from the contamination at the site. Hydro, in March 1991, filed the instant action against Kayser-Roth in Rhode Island Superior Court, seeking, inter alia, indemnification for the damages it suffered as a result of the CERCLA suit. More precisely, Hydro contended that as an innocent purchaser, it was entitled to recover from Kayser-Roth — the party responsible for the damage — the value of the land forfeited to the United States, as well as the costs incurred in defending the CERCLA suit. Initially Hydro’s complaint consisted of one count sounding in negligence. Hydro subsequently filed an amended complaint advancing six additional theories of recovery including private and public nuisance, abnormally dangerous activity, failure to disclose, and two claims under G.L.1956 (1991 Reenactment) § 46-12-21, a statute on liability for *954 pollution of groundwater. Kayser-Roth moved for summary judgment on all seven counts, arguing that no genuine issues of material fact existed and that Kayser-Roth was entitled to judgment as a matter of law. The trial justice found that there were no genuine issues in regard to material facts and, relying primarily on Wilson Auto Enterprises, Inc. v. Mobil Oil Corp., 778 F.Supp. 101 (D.R.I.1991), held that Kayser-Roth was entitled to judgment as a matter of law. Hydro filed a timely appeal from the summary-judgment order pursuant to G.L.1956 (1985 Reenactment) § 9-24-1.

This court reviews the propriety of a summary-judgment order according to the same standards that the trial justice applies in deciding whether to grant a party’s motion. McPhillips v. Zayre Corp., 582 A.2d 747, 749 (R.I.1990).

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Bluebook (online)
640 A.2d 950, 39 ERC (BNA) 1236, 1994 R.I. LEXIS 124, 1994 WL 136025, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hydro-manufacturing-inc-v-kayser-roth-corp-ri-1994.