United Environmental Group, Inc. v. GKK McKnight, LP

176 A.3d 946
CourtSuperior Court of Pennsylvania
DecidedDecember 15, 2017
Docket1956 WDA 2016; 294 WDA 2017; 55 WDA 2017; 82 WDA 2017
StatusPublished
Cited by26 cases

This text of 176 A.3d 946 (United Environmental Group, Inc. v. GKK McKnight, LP) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Environmental Group, Inc. v. GKK McKnight, LP, 176 A.3d 946 (Pa. Ct. App. 2017).

Opinion

OPINION BY

SOLANO, J.:

This is an action by United Environmental Group, Inc. for damages relating to environmental remediation services that it performed at property on McKnight Road in Ross Township, Allegheny County, the former site of a gas station. There are two groups of defendants: (1) GKK McKnight, LP, a Pennsylvania limited partnership, and GKK Capital, LLC, a Pennsylvania limited liability company (together, “GKK”); and (2) Golden Oil Co., a Pennsylvania corporation, and Kehm Oil Co., a Pennsylvania corporation (together, “Golden”). Following a jury trial, United obtained a judgment in its favor against all defendants. At Docket Nos. 1956 WDA 2016 and 294 WDA 2017, United appeals from that judgment because it failed to include all of the elements of recovery that it sought. At Docket No. 55 WDA 2017, Golden cross-appeals from the judgment in favor of United. At Docket No. 82 WDA 2017, GKK cross-appeals from the rejection of its cross-claim against Golden. We vacate the judgment at Nos. 1956 WDA 2016 and 294 WDA 2017 and remand for further proceedings. We affirm the judgment at Nos. 55 WDA 2017 and 82 WDA 2017.

Golden owned the gas station at the Ross Township property until 2007, when it sold the property to GKK. There were several underground tanks on the property that were used to store gasoline, and, prior to the sale, Golden asked United, a company that excavates tanks and does environmental cleanup for gas stations, to submit quotes for the removal of the tanks on the property.

Golden and United had done business in the past. At trial, United’s president, Stephen Klesic, testified to United’s longstanding business relationship with Golden and its president, George Kehm:

[Q] ... How long has [United] done work for Mr. Kehm and his companies? You said about 30 years?
A Over 30 years, it was in the early ’70s—or late ’70s early, ’80s.
Q Do you recall how many projects or jobs you’ve done in that time period for him?
A From service calls to tank installations to tank removals, probably over a thousand.
Q And how did these jobs typically start? Who arranged them?
A We would either get a call from Mr. Kehm or his secretary, Kathy. If it was a service call, you know, usually in the morning between 6 and 7:00 a.m., we were in, George [Kehm] was in, Kathy was in. We’d get a call because he’s cheeking with his stations and there was a problem at one of the stations that needed maintenance. If it was something other than a general maintenance issue, we may get a fax, hey, we have facility operations inspections which are required by PADEP [the Pennsylvania Department of Environmental Protection], they are to be done every three years. And we would get a fax, hey, these inspections are up for our facility and we need to do them and get them scheduled.
Q And how were you typically paid for these jobs?
A We were typically paid in 80 days or less.
Q .From.yourinvoice?
A From my invoices.
Q When you sent an invoice from [United], did it typically have an interest rate on it?
A . Yes, our invoices were zero percent discount-zero days, net ten, and then a one-and-a-half percent 80 days—or interest per month.

N.T., 5/11/15, at 56-57. Simply stated, after thirty days, United would charge 1.5% interest per month on the balance. Id. at 58.

Kehm testified that United typically would invoice Golden for its services, and Golden would pay United and obtain reimbursement from Pennsylvania’s Underground Storage Tank Indemnification Fund, a fund established by the Commonwealth to assist with the removal of underground petroleum storage tanks. See N.T., 5/11/15, at 102-03. 1 Since 1994, Kehm had been involved in about fifty' remediations that involved the Tank Fund, and he testified that he had never had the Fund deny reimbursement. Id.

Paragraph 10 of the August 2007 agreement for sale of. the property from Golden to GKK provided as follows:

Seller’s Expenses: Seller shall be responsible for cost of deed preparation and all matters of title clearance. Seller shall also be responsible for bringing the Property into compliance with the applicable Pennsylvania Department of Envi- • ronmental Protection’s Underground [Storage Tank] (UST) regulations for site closure.

Ex. C. at ¶ 10 „to United’s Fourth Am. Compl., 2/29/12. Closing on the sale of the property occurred in August or September of 2008, and,around that same time, Kehm directed United to submit its quote-- -for removal of the tanks to Jonathon Kamin, GKK’s manager. The quote estimated a cost of $13,567 to remove the storage tanks and any contaminated material and to fill the resulting hole with uncontaminated soil. In pertinent part, the estimate provided, “This work will be handled on a Time & Material basis, while all costs associated with the removal of the contaminated material should be covered under [the Tank Fund] with a $5,000 deductible per release, it is ultimately the owner[’]s responsibility for these additional expenses.” Ex. A to Fourth Am. Compl., 2/29/12. The estimate, did not include an integration clause. GKK signed the estimate next to the word “Accepted.” Id. Although the signature is not dated,. GKK apparently signed- on September 22, 2008.- See N.T., 5/11/15, at 82.

United began work the next day and almost immediately discovered contaminated soil. N.T., 5/11/15, at 83. United'promptly notified GKK, Golden, the Pennsylvania Department of Environmental Protection (“DEP”), and the Tank Fund, in order to initiate a formal claim for reimbursement. Id. at 83. During the course of remediation, United discovered additional storage tanks that had to be removed. Id. at 87. According to United, GKK and Golden directed United to perform the work needed to remediate the contamination that it found and represented that its invoices would be paid. Id. at 70-72.

In this connection, Golden’s counsel cross-examined Klesic of United regarding the basis for its claim against Golden (which counsel personalized in his questions by referencing Golden’s president, Kehm) and whether United contended; that it was suing under the remediation contract that Klesic (for United) had signed with Kamin of GKK:

Q. Do you know what contract you are suing Mr. Kehm under?
A. It is my understanding that that contract, as it is there, was with Mr. Kamin. Mr. Kehm had guaranteed the cleanup of the site to Mr.- Kamin, and then subsequently ordered me to, basically, do whatever is necessary to keep Mr. Kamin happy and clean up the property.
Q. Just to be clear, you are not suing Mr. Kehm under this contract?
A.

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Cite This Page — Counsel Stack

Bluebook (online)
176 A.3d 946, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-environmental-group-inc-v-gkk-mcknight-lp-pasuperct-2017.