Schuchman/Samberg Investments, Inc. v. Hoosier Penn Oil Co. Inc.

58 N.E.3d 241, 2016 Ind. App. LEXIS 286, 2016 WL 4140986
CourtIndiana Court of Appeals
DecidedAugust 4, 2016
Docket49A02-1508-MI-1051
StatusPublished
Cited by3 cases

This text of 58 N.E.3d 241 (Schuchman/Samberg Investments, Inc. v. Hoosier Penn Oil Co. Inc.) 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
Schuchman/Samberg Investments, Inc. v. Hoosier Penn Oil Co. Inc., 58 N.E.3d 241, 2016 Ind. App. LEXIS 286, 2016 WL 4140986 (Ind. Ct. App. 2016).

Opinion

Case Summary

ALTICE, Judge.

[1] In this certified interlocutory appeal, Schuchman/Samberg Investments (SSI) appeals the trial court’s order granting summary judgment in favor of defendants Hoosier Penn Oil Company, Inc., Union Oil Company of California, and BP Corporation North America,’- Inc. (collectively, the Former Operators) on SSI’s claims under Indiana’s Environmental Legal Actions Statute (ELA) and Petroleum Releases Statute (PRS). Specifically, the trial court ruled that the ELA claim was time-barred and that SSI had not established that it had a right to recover under the PRS. SSI- raises the following restated issues on appeal:

1. Did the trial court err in concluding that the ELA claim was subject to the six-year statute of limitation applicable to claims for damage to real property?
2. Did the trial court err in concluding that the statute of limitation applicable to the ELA claim had expired?
3. Did the trial court err in concluding that the PRS did not permit SSI to recover investigation and remediation costs from the Former Operators under the circumstances of this case?

We affirm. 1

Facts & Procedural History

[2] This case revolves around a piece of environmentally contaminated industrial property located at 850 ■ South Keystone Avenue in Indianapolis (the Site). Historically, the Site has been used for bulk storage of oil and other petroleum products in underground storage tanks (USTs) and aboveground storage tanks (ASTs). Standard Oil owned and operated the Site from the 1920s until 1941, at which time Union Oil took ownership. Union Oil operated the Site until 1975, at which time it was purchased by Carl and Florence Hu-len/Hulem Real Estate, LLC (collectively, Hulen). From 1975 until T978, Hulen leased the property to Univar USA, Inc., *244 which operated a chemical distribution facility and stored large volumes of industrial solvents on the Site. From 1979 until 1995, Hulen leased the Site to Hoosier Penn Oil, which used it to operate a lubricant oil and antifreeze distribution center. In 1995, Hulen sold the property to Wil-cher Trucking, Inc. (Wilcher) on contract, 2 and SSI 3 leased the Site from Wilcher. SSI used the Site to operate a metal scrapyard and a diesel fuel storage tank. SSI purchased the Site from Wilcher in 1998.

[3] In 1994, while the Site was owned by Hulen and being leased by Hoosier Penn, Keramida Environmental conducted testing of the soil and groundwater at the Site as part of ongoing negotiations concerning Hoosier Penris potential purchase of the Site. Although Keramida did not conduct a full investigation of the Site, it nevertheless discovered contamination in multiple areas of the Site that met or exceeded state and federal standards in effect at the time that would have required remediation. Keramida provided a Corrective Action Plan (the Keramida CAP) to Hoosier Penn, Hulen, and Huleris attorneys in which it set forth its findings and recommended extensive soil and groundwater testing and remediation. In light of the extent of the contamination and potential investigation and remediation costs identified in the Keramida CAP, Hoosier Penn offered to purchase the property from Hulen for $1, with the understanding that Hoosier Penn would undertake the remedial actions set forth in the Keramida CAP. Hulen refused the offer, and Hoosier Penn relocated its business. In June 1994, Huleris attorney reviewed the Keramida CAP and sent Hulen a letter setting forth his opinion that no regulatory authority would reasonably require further investigation or corrective action at the Site. No remediation was conducted at that time.

[4] Shortly thereafter, Hulen sold the property to Wilcher. As part of the transaction, Hulen and Wilcher executed and recorded an “Environmental Disclosure Document for Transfer of Real Property” (the Disclosure Document), as was required by applicable law at that time. Appellant’s Appendix at 325. The Disclosure Document makes repeated reference to an environmental report prepared by Patriot Engineering (the Patriot Report). The Disclosure Document indicated that the transferor had conducted operations on the Site involving hazardous substances, petroleum, and hazardous waste, and that there were ASTs, USTs, and container storage areas on the Site. The Disclosure Document further indicated that hazardous substances or petroleum had come into contact with the ground at the Site and that soil testing and groundwater monitoring had been conducted at the Site as a result. The Disclosure Document indicated that there were no other environmental defects on the Site, but there was an asterisk next to this representation directing the reader to “see reported soil and groundwater contamination as described in the aforementioned Patriot Report.” Id. at 333. The drafter of the Disclosure Document answered several questions on the form in the negative, but added language directing the reader to review the Patriot Report. The Disclosure Document, but not the Patriot Report, was incorporated into the deed record available to the public prior to SSI’s purchase of the Site. The Disclosure Document indicates that a copy of the Patriot Report is available upon request *245 from Hulen, but the Patriot Report was not designated in this case, and it appears that the parties have been unable to locate it.

[5] On May 8,1996, an employee of the Marion County Health Department conducted a field inspection at the Site and spoke to Barry Schuchman, one of SSI’s principals. In his inspection notes, the investigator noted that removal of an old AST basin and metal tanks had exposed “highly contaminated soil/some pools of fluid on water.” Id. at 167. The inspection notes indicate that Schuchman informed the investigator that Hoosier Penn would be performing remediation in the area. No such remediation occurred.

[6] Shortly after entering into the lease with Wilcher, SSI entered into negotiations to purchase the Site. Schuchman testified that during those negotiations, Wil-cher provided SSI with a copy of a Phase I environmental report that had been prepared in conjunction with Wilcher’s purchase of the Site from Hulen (the Wilcher Phase I). According to Schuchman, the Wilcher Phase I was a one-page document that “said the property was clean and there was no problem with the property.” Appellant’s Appendix at 339. The Wilcher Phase I has not been produced in this litigation or designated as evidence.

[7] Schuchman testified further that in 1997, prior to SSI’s purchase of the Site, he personally observed stained soil around the former ASTs and that SSI consequently had the top two feet of soil in that area excavated and removed. No testing was done to ascertain the extent of the contamination or to confirm that the excavation was sufficient remediation, and neither SSI nor Wilcher obtained a determination from the Indiana Department of Environmental Management (IDEM) that no further action was necessary.

[8] In June 1998, shortly after purchasing the Site, SSI received a copy of another Phase I environmental report (the 1998 Phase I).

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Cite This Page — Counsel Stack

Bluebook (online)
58 N.E.3d 241, 2016 Ind. App. LEXIS 286, 2016 WL 4140986, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schuchmansamberg-investments-inc-v-hoosier-penn-oil-co-inc-indctapp-2016.