Parks Hiway Enterprises, LLC v. CEM Leasing, Inc.

995 P.2d 657, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20349, 40 U.C.C. Rep. Serv. 2d (West) 678, 50 ERC (BNA) 1029, 2000 Alas. LEXIS 9, 2000 WL 146849
CourtAlaska Supreme Court
DecidedFebruary 4, 2000
DocketS-8593
StatusPublished
Cited by25 cases

This text of 995 P.2d 657 (Parks Hiway Enterprises, LLC v. CEM Leasing, Inc.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Parks Hiway Enterprises, LLC v. CEM Leasing, Inc., 995 P.2d 657, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20349, 40 U.C.C. Rep. Serv. 2d (West) 678, 50 ERC (BNA) 1029, 2000 Alas. LEXIS 9, 2000 WL 146849 (Ala. 2000).

Opinion

OPINION

MATTHEWS, Chief Justice.

I. INTRODUCTION

After Parks Hiway’s groundwater was contaminated by fuel leaking from an adjacent service station, it sued the station’s fuel supplier, Petroleum Sales. The superior court granted summary judgment to Petroleum Sales, finding its relationship to the contamination too remote to impose statutory or common law liability. Parks Hiway now appeals the court’s dismissal of its various claims. Because we agree with the superior court’s findings, we affirm.

II. FACTS AND PROCEEDINGS

Phillip and Genevieve Carboy have owned and operated the Gold Hill Service Station in Fairbanks since 1981. Throughout the Carboys’ ownership, Gold Hill maintained up to three underground storage tanks on its property to hold gasoline. Although the Carboys checked their tanks periodically for leaks, they failed to comply with regulations requiring tank operators to report the tanks’ registration numbers, proof of financial responsibility, and proof of testing to the state.

From 1981 until 1994, Petroleum Sales, Inc., supplied petroleum products to Gold Hill. When Gold Hill required additional fuel, Phillip Carboy would telephone Petroleum Sales and place an order. Petroleum Sales would then deliver the product to Gold Hill and directly fill the appropriate tanks. Carboy did not instruct Petroleum Sales’ delivery personnel on how to fill the tanks during this process.

Gold Hill and Petroleum Sales are independent, separately owned, unaffiliated companies. Petroleum Sales did not oversee, manage, or operate the Gold Hill station and did not construct, install, maintain, or test the station’s tanks. Moreover, Gold Hill never asked or authorized Petroleum Sales to perform any such work.

Parks Hiway Enterprises, LLC, owned the parcel adjacent to the Gold Hill station. In 1994 the Alaska Department of Environmental Conservation (the Department) determined that benzene had contaminated the groundwater under Parks Hiway’s property. The Department identified Gold Hill as a probable source of the pollution. Gold Hill promptly removed its tanks, after which investigators discovered that the soil and groundwater surrounding the tank area were heavily contaminated with petroleum components. The rate of leakage was estimated at approximately one to two quarts per month over a twenty-year period.

Parks Hiway subsequently ceased drawing drinking water from its well. Parks Hiway suffered economic loss as a result of this action.

Parks Hiway sued the Carboys in 1995 and settled with them in 1996. In 1997 Parks Hiway filed an amended complaint naming Petroleum Sales as a defendant. Parks Hi-way’s amended complaint also named as defendants CEM Leasing, Inc., James E. Weymiller, Steven C. Winquist, and Phillip M. Tannehill. We refer to these defendants collectively as “Petroleum Sales.” The complaint alleged that Petroleum Sales was responsible for the soil and groundwater contamination of Parks Hiway’s property, and it *660 asserted claims under strict liability, nuisance, trespass, and negligence theories.

Petroleum Sales moved for summary judgment in March 1997. The superior court granted Petroleum Sales’ motion on December 16, 1997. Parks Hiway subsequently moved both for reconsideration and to file an amended complaint. The superior court agreed to reconsider its ruling. But in its January 23, 1998, order granting final judgment to Petroleum Sales, the court ultimately denied both of Parks Hiway’s motions.

Parks Hiway appeals the superior court’s grant of summary judgment to Petroleum Sales, the denial of its motion to submit an amended complaint, and the court’s refusal to strike two affidavits Petroleum Sales submitted during the summary judgment proceedings.

III. DISCUSSION

A. Standard of Review

We review grants of summary judgment de novo. 1 We will affirm the ruling if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. 2 We draw all reasonable inferences of fact in favor of Parks Hiway as the non-moving party. 3 Because this case involves various questions of law, we are not bound by the lower court’s decision and will instead adopt the rule of law “most persuasive in light of precedent, reason, and policy." 4

B. The Superior Court Did Not Err by Granting Summary Judgment to Petroleum Sales on Parks Hiway’s Statutory Strict Liability Claims.

Alaska Statute 46.03.822 imposes strict liability on the owners and transporters of hazardous substances for unpermitted releases of the substance. 5 Parks Hiway argues on appeal that the superior court erred by refusing to characterize Petroleum Sales as an “owner,” “person having control,” or “transporter” of the fuel.

1. Petroleum Sales was not an “owner” or “person having control” under AS 16.08.822(a)(1).

Alaska Statute 46.03.822(a)(1) imposes strict liability on “the owner of, and the person having control over, the hazardous substance at the time of the release.” The superior court found subsection .822(a)(1) inapplicable to Petroleum Sales, ruling that the company neither owned nor controlled the fuel when it leaked from Gold Hill’s tanks and contaminated the underlying groundwater. Parks Hiway challenges the court’s conclusion, arguing that Petroleum Sales still *661 retained control over the fuel even after title had passed to Gold Hill.

a. Petroleum Sales was not an “owner” of the fuel at the time of the release.

Alaska’s hazardous substance statute defines “owner” for purposes of AS 46.03.822(a)(1) in circular terms. 6 Other courts confronting the equally circular definition of “owner” under the corresponding Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) provision have given the term its ordinary meaning. 7 The superior court employed a title theory of ownership for purposes of AS 46.03.822(a)(1), under which the “owner” is the person holding title to the fuel upon its transfer into Gold Hill’s tanks. The court relied on Redwing Carriers, Inc. v. Saraland Apartments, which interpreted the term “owner” for purposes of CERCLA liability as the party holding title to the polluted site. 8 Parks Hiway offers no authority supporting a contrary definition.

We agree with the superior court. As a movable good, the fuel that Petroleum Sales supplied to Gold Hill was governed by AS 45.02, Alaska’s version of the Uniform Commercial Code (UCC). 9

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995 P.2d 657, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20349, 40 U.C.C. Rep. Serv. 2d (West) 678, 50 ERC (BNA) 1029, 2000 Alas. LEXIS 9, 2000 WL 146849, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parks-hiway-enterprises-llc-v-cem-leasing-inc-alaska-2000.