Kaghann's Korner, Inc. v. Brown & Sons Fuel Co.

706 N.E.2d 556, 1999 Ind. App. LEXIS 179, 1999 WL 93352
CourtIndiana Court of Appeals
DecidedFebruary 25, 1999
Docket17A03-9802-CV-79
StatusPublished
Cited by20 cases

This text of 706 N.E.2d 556 (Kaghann's Korner, Inc. v. Brown & Sons Fuel Co.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kaghann's Korner, Inc. v. Brown & Sons Fuel Co., 706 N.E.2d 556, 1999 Ind. App. LEXIS 179, 1999 WL 93352 (Ind. Ct. App. 1999).

Opinion

*559 OPINION

RILEY, Judge

STATEMENT OF THE CASE

Defendant-Appellant Kaghann’s Korner, Inc. appeals two trial court decisions: 1) “Court Decision Enforcing Contract for Sale of Real Estate” (“Contract Decision”), ordering Kaghann’s Korner to specifically perform its obligations required by an enforceable agreement for the sale of Kaghann’s Kor-ner’s real estate and business to Brown & Sons Fuel Company, Inc. (“Brown”); and 2) “Court Decision Awarding a Civil Money Judgment for Damages Based on Negligence” (“UST Decision”), finding that Brown negligently caused a fuel spill at Kaghann’s Korner’s underground storage tank (“UST”), but failing to find that Brown violated the Indiana Underground Storage Tank Act (“USTA”). Ind.Code § 13-23 et seq.

Plaintiff-Appellee Brown cross-appeals on the “Court Decision Establishing Partial Summary Judgment” in favor of Kaghann’s Korner and against Brown, finding that Brown failed to strictly perform its implied contractual obligations to deliver diesel fuel to Kaghann’s Korner in a safe, reasonable, and workmanlike manner, thereby committing a breach of contract.

We affirm in part and reverse in part.

ISSUES

Kaghann’s Korner raises three issues for our review which we restate as follows:

1. Whether the trial court erred in finding that Brown was not an owner or operator of the UST as defined under the USTA at the time of the fuel overfill. 1
2. Whether the trial court erred in determining that Brown did not cause a release of fuel as defined under the USTA. 2
3. Whether the trial court correctly ordered Kaghann’s Korner to specifically perform its obligations required by the January 18, 1995 Letter of Understanding (“Letter”).
4. Whether the trial court lacked jurisdiction to enter its January 15, 1998 order subsequent to its original August 11, 1997 judgments.

Brown raises one issue on cross-appeal for our review which we restate as: whether the trial court erred in finding that as a matter of law Brown failed to strictly perform its contractual obligations, thereby committing a breach of contract.

FACTS AND PROCEDURAL HISTORY

On January 18, 1995, Kaghann’s Korner and Brown entered into a contract for the sale of the Kaghann’s Korner business and real estate. This contract included the Letter, a Promissory Note (Note), a Commercial Realty Lease (Lease), and a Fuel Supply Agreement (Agreement). The Letter stated a purchase price of $335,000 with a $50,000 cash down payment due from Brown at closing. The Note was for the remaining $285,-000 and called for 120 consecutive monthly payments of principal and interest of $3,458 at eight percent per annum for ten years. The Lease was an agreement whereby Ka-ghann’s Korner, as tenant, was to pay Brown, as landlord, the sum of $40,200 per annum, payable in equal monthly installments of $3,350. The Agreement was for Kaghann’s Korner to purchase all fuel product requirements from Brown in order to guarantee Kaghann’s Korner a pre-estab-lished margin for each fuel grade. Brown paid to Kaghann’s Korner the $50,000 down payment at closing. Kaghann’s Korner has continued to possess the real estate and operate the business but has failed to pay to Brown any of the $3,350 monthly lease payments agreed to in their Lease and has failed to obtain title insurance and deliver a warranty deed.

On March 30, 1995, Jay E. Brown, on behalf of Brown & Sons Fuel, delivered a truckload of diesel fuel to Kaghann’s Korner. However, while in the process of filling a 4,000 gallon UST at Kaghann’s Korner and while not paying attention, Jay E. Brown caused an overfill of the tank resulting in diesel fuel being spilled onto the concrete *560 surface in the area and onto and into the ground in the area.

On March 25, 1996, the Dekalb County Circuit Court entered its “Decision Establishing Partial Summary Judgment” in favor of Kaghann’s Korner and against Brown for spilling diesel fuel on the property, thereby constituting a breach of an implied contract term of the fuel supply contract that the fuel be delivered in a safe, reasonable, and workmanlike manner using reasonable care.

On August 11, 1997, the Dekalb County Circuit Court entered two judgments. First, in the “Court Decision Enforcing Contract for Sale of Real Estate,” the trial court ordered Kaghann’s Korner to specifically perform its obligations required by the January 18, 1995 Letter, including the implied obligation to deliver to Brown a warranty deed and title insurance coverage. Further, the order bound Brown by the terms of the Note and both parties remained bound by the terms of the Lease. The second order was the “Court Decision Awarding a Civil Money Judgment for Damages Based on Negligence,” whereby the trial court entered a judgment in favor of Kaghann’s Korner and against Brown for $62,929.81 together with court costs and statutory judgment interest from and after August 11,1997.

On January 15, 1998, the trial court entered a judgment pursuant to Indiana Trial Rule 70, ordering the money judgment funds from the August 11, 1997 judgment to be held in escrow for the sole purpose of cleaning up the environmental damage done by the fuel overfill at Kaghann’s Korner.

Kaghann’s Korner appeals the January 15, 1998 judgment as well as the two August 11, 1997 judgments while Brown appeals the March 25,1996 judgment.

DISCUSSION AND DECISION

I. Owner or Operator

Kaghann’s Korner argues that the trial court erred in finding that Brown did not own or operate the USTs and therefore was not liable under the USTA. Specifically, Ka-ghann’s Korner contends that Brown is liable under the Act because it was both an owner and an operator of the USTs at the time of the fuel spill.

In order for a party to be held liable for costs under the USTA, it must be shown that the party either “owned or operated the underground storage tank at the time” when the fuel overfill occurred. Ind.Code § 13-23-13-8(b).

A. Owner

Kaghann’s Korner argues that Brown owned the USTs at the time the fuel overfill occurred because the trial court found that Kaghann’s Korner and Brown entered into an enforceable contract for the sale of Ka-ghann’s Korner. According to the USTA, the definition of “owner” is a person who owns the underground storage tank, but specifically does not include a person who does not participate in the management of a UST, is otherwise not engaged in the production, refining, and marketing of regulated substances, and holds indicia of ownership primarily to protect the owner’s security interest in the tank. Ind.Code §

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Bluebook (online)
706 N.E.2d 556, 1999 Ind. App. LEXIS 179, 1999 WL 93352, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kaghanns-korner-inc-v-brown-sons-fuel-co-indctapp-1999.