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325-343 E. 56th Street Corporation

October 19, 1995

325-343 E. 56th Street Corporation, Plaintiff,
v.
Mobil Oil Corporation et. al., Defendants.



The opinion of the court was delivered by: URBINA

 I. CASE HISTORY

 On January 19, 1993, Plaintiff, 325-343 E. 56th Street, Fifty-Fifty Corporation, on behalf of The Corps Limited Partnership (hereinafter "The Corps"), filed a complaint against Mobil Oil Corporation (hereinafter "Mobil"), Atlantic Richfield Company (hereinafter "ARCO"), and the Washington Metropolitan Area Transit Authority (hereinafter "WMATA") in the Superior Court for the District of Columbia. Defendant WMATA removed the case to this court pursuant to D.C. Code Ann. § 1-2431 (1992).

 The Complaint is based on nine counts for: (1) strict liability; (2) trespass; (3) common law indemnification; (4) negligence; (5) violation of the District of Columbia Underground Storage Tank Act; (6) negligence per se for violation of the District of Columbia Underground Storage Tank Act; (7) restitution; (8) negligence per se for violations of 40 C.F.R. §§ 280-81; and (9) contractual indemnification. Plaintiff has moved for summary judgment pursuant to Fed. R. Civ. P. 56(c). Defendant ARCO has moved for dismissal of the Plaintiff's Complaint pursuant to Fed. R. Civ. P. 12(b)(6). Defendant WMATA has filed a cross-motion for summary judgment.

 II. BACKGROUND

 A. The Defendants

 From 1985 through October of 1992, the Corps owned a piece of property (hereinafter "the property"), the subject of this lawsuit, located at the corner of 12th Street, H Street, and New York Avenue in Northwest Washington, D.C.

 Defendant Mobil is the successor-in-interest to Socony Mobil Company, Inc., which leased the property from 1962 through 1974.

 Defendant ARCO is the successor-in-interest of Sinclair Refining Company (hereinafter "Sinclair") which leased the property from 1946 through 1949.

 Defendant WMATA, an instrumentality and agency of the governments of the District of Columbia, the State of Maryland, and the Commonwealth of Virginia, owned the property from 1974 to 1981.

 B. Ownership and Alleged Usage of the Property

 On or about March 20, 1946, Riva Honig leased the property to Sinclair for a period of three years beginning on April 8, 1946. Sinclair operated or permitted others to operate a gasoline service station which sold and dispensed petroleum products on the property. Underground storage tanks, (hereinafter "USTs"), supply lines, and pumps were installed on the property.

 In October of 1949, Helen Wright acquired the property from Riva Honig. On or about March 8, 1962, Wright leased the property to Mobil for a term of fifteen years. Mobil's lease provided, in part, for indemnification against all claims, demands, and liabilities based on damages or injuries to property occasioned by Mobil's negligence in the conduct and operation of its business on the property.

 From 1962 until 1974, Mobil operated and/or permitted others to operate gasoline service stations, which sold and dispensed petroleum products on the property. Mobil built an entirely new gasoline and service station on the property in 1963. It installed four four-thousand (4000) gallon tanks to serve the new station. Upon termination of the Mobil Lease, Mobil neither slurried nor removed any USTs or pumps.

 Thereafter, WMATA hired Ace Wrecking & Building Material Company (hereinafter "Ace") to, inter alia, remove the USTs and demolish the pumps on the property. Ace purportedly removed certain USTs, demolished the pumps, and backfilled the excavation site with sand.

 On or about February 26, 1981, WMATA conveyed the property in fee simple, subject to WMATA's subsurface easement and right of way, to James, Theodore, and Evangeline Pedas. No gasoline service station or related services operated on the property during the Pedases' ownership.

 On or about December 31, 1983, the property was conveyed by the Pedases to the Cafritz Construction Company, the Morris and Gwendalyn Cafritz Foundation, Riggs National Bank, Gwendalyn D. Cafritz, Calvin Cafritz, and Martin Atlas (collectively, "Cafritz"). No gasoline service station or related services operated on the property during the Cafritz's ownership.

 The Corps acquired the property from Crafritz in 1985. No gasoline service station or related services operated on the property during the Corps' ownership. On or about November 13, 1989, Chase Manhattan Bank, in conjunction with a mortgage placed on the property, required the performance of an environmental study. Briggs Associates, Inc. (hereinafter "Briggs") was engaged to perform the study, the culmination of which was a report. The study was undertaken to determine if a release of petroleum products or hazardous materials had occurred on the property.

 According to the Briggs Report, Briggs visually inspected the property for contamination, performed a site history investigation, and collected soil samples for testing. The Briggs Report concluded that the USTs had been removed and that there had been no releases of any hazardous or toxic substances, including petroleum, on the property.

 On or about July 30, 1992, the Corps entered into a purchase contract with the American Association for the Advancement of Science (hereinafter "AAAS") for sale of the property. On October 9, 1992, the property was sold by the Corps to AAAS. The Purchase Contract entitled AAAS to perform a feasibility study on the property prior to sale.

 In August of 1992, Schnabel Engineering Associates, Inc. (hereinafter "SCS") performed a feasibility study on behalf of AAAS. The study included geo-technical and environmental tests on the property. SCS's study revealed that petroleum and petroleum substances contaminated the property. The Corps then retained SCS, which confirmed that the soil on the property was contaminated. On behalf of the Corps, SCS notified District of Columbia Department of Consumer and Regulatory Affairs (hereinafter "DCRA") of the petroleum contamination on the property. DCRA directed the Corps to remediate the property.

 On September 2, 1992, the Corps through SCS commenced remediation. SCS discovered six USTs on the property, specifically, four two-thousand-five-hundred (2500) gallon gasoline USTs partially filled with sludge, one five-hundred-and-fifty (550) gallon waste oil UST partially filled with sludge, and one one-thousand (1000) gallon gasoline UST containing waste oil sludge. Additionally, one concrete oil/water separator, which contained approximately three-hundred (300) gallons of waste oil sludge, was discovered. All six USTs and the separator were corroded and contained cracks and holes. SCS also discovered two sets of underground supply or transfer lines, along with connected piping, lines, and fittings on the property. Residual petroleum products were found in and around these supply or transfer lines which contained numerous leaks and holes. (See Compl. PP 30-32.) Pursuant to directives from DCRA, the Corps completed removal of the USTs and contaminated soil from the property.

 The Corps now seeks to recover the costs it incurred in remediating the property totalling not less than $ 1,100,000.09, as well as lost profits associated with the use of the property during the remediation process and attorney's fees.

 III. LEGAL STANDARDS

 A. Fed. R. Civ. P. 12(b)(6)

 A complaint should not be dismissed under Fed. R. Civ. P. 12(b)(6) unless "the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." See Schuler v. United States, 199 U.S. App. D.C. 23, 617 F.2d 605, 608 (D.C. Cir. 1979) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)). When passing judgment on the legal efficacy of a plaintiff's claim, the court may only look at the complaint, items in the record of the case, and matters of public record. Phillips v. Bureau of Prisons, 192 U.S. App. D.C. 357, 591 F.2d 966, 969 (D.C. Cir. 1979); see Marshall County Health Care Auth., 300 U.S. App. D.C. 263, 988 F.2d 1221, 1226 (D.C. Cir. 1993) (citing Phillips).

 The complaint must be liberally construed in the plaintiff's favor, including any inferences derived from the factual allegations. Id. The court, however, need not accept inferences unsupported by the facts. Kowal v. MCI Communications Corp., 305 U.S. App. D.C. 60, 16 F.3d 1271, 1276 (D.C. Cir. 1994). The court also does not have to accept plaintiff's legal conclusions. Papasan v. Allain, 478 U.S. 265, 286, 92 L. Ed. 2d 209, 106 S. Ct. 2932 (1986); Kowal, 16 F.3d at 1276. *fn2" Therefore, a complaint may be dismissed under Fed. R. Civ. P. 12(b)(6) for lacking a cognizable legal claim. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). It is also within the court's power to dismiss an issue of first impression under Fed. R. Civ. P. 12(b)(6). See McKenna v. Washington Metro. Area Transit Auth., 670 F. Supp. 7, 8 & n.1 (D.D.C. 1986), aff'd 264 U.S. App. D.C. 401, 829 F.2d 186 (D.C. Cir. 1987). This case presents the court with a variety of legal issues of first impression in this jurisdiction. Additionally, when a federal court is considering a state law claim, Fed. R. Civ. P. 12(b)(6) does not require the court to make a leap of faith and apply a legal theory that has not been recognized or applied in the particular state. See Shoreham Hotel Ltd. Partnership v. Wilder, 866 F. Supp. 1, 5-6 (D.D.C. 1994) (declining to extend theory of promoter liability to situation in which it has never been applied in District of Columbia).

 B. Fed. R. Civ. P. 56(c)

 Federal Rule of Civil Procedure 56(c) provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The court must view the facts and any permissible inferences drawn from them in a light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). For a fact to be material, it must be a fact that the substantive law identifies as possibly affecting the outcome of the suit. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Consequently, the presence of a material fact is predicated on the existence of a legal theory that is viable under the non-moving party's version of the facts. Holloway v. Pigman, 884 F.2d 365, 366 (8th Cir. 1989); Park Center Inc. v. Champion Int'l Corp., 804 F. Supp. 294, 304 (S.D. Ala. 1992); see Dine v. Western Exterminating Co., 1988 U.S. Dist. LEXIS 4745, at *13, No. 86-1857- OG, 1988 WL 25511, at *4 (D.D.C. Mar. 9, 1988) (granting defendants motion for summary judgment after concluding plaintiffs could not invoke principle of negligence per se).

 When the unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate. Crain v. Board of Police Comm'rs of Metro. Police Dep't, 920 F.2d 1402, 1405-06 (8th Cir. 1990). Such issues include matters turning on statutory interpretation. See Edwards v. Aguillard, 482 U.S. 578, 594-97, 96 L. Ed. 2d 510, 107 S. Ct. 2573 (1987) (holding that no genuine issue of material fact existed as to statute's purpose because appropriate determination focuses on statute's language and legislative history). *fn3"

 On cross-motions for summary judgment, the court shall not grant summary judgment unless one of the moving parties is entitled to judgment as a matter of law upon facts that are not genuinely in dispute. Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975); see 6 James W. Moore, et al., Moore's Federal Practice P 56.13, at 56-171 (2d ed. 1994) (discussing effect of cross-motions). In the instant case there is no genuine factual disputes that would preclude the granting of summary judgment. Rather, the fundamental questions to be resolved are legal ones.

 IV. ANALYSIS

 A. The Applicability of the District of Columbia Statute of Repose: *fn4"

 Defendants' *fn5" argue that the District of Columbia Statute of Repose bars all the Plaintiff's statutory and tort claims against them. The statute encompasses actions brought to recover for an injury to real or personal property "resulting from the defective or unsafe condition of an improvement to real property...." D.C. Code Ann. § 12-310 (a)(1)(A)(ii) (1995). All actions covered under the statute "shall be barred unless the case where injury is the basis of such action, such injury occurs within the ten-year period beginning on the date the improvement was substantially completed...." D.C. Code Ann. § 12-310 (a)(1)(B).

 This statute bars any action for damages by defective or unsafe improvements to real property when the injury occurs later than ten years from the date the improvement was substantially completed. J.H. Westerman Co. v. Fireman's Fund Inc., 499 A.2d 116, 118 (D.C. 1985). Although the court in J.H. Westerman acknowledged that D.C. Code Ann. § 12-310 "is broad and far-reaching," it expressly excluded owners and possessors from the statute's protection. Id. at 120. Moreover, the court pointed out that when Congress sought to exclude a particular class from the operation of the statute, it did so expressly. Id.

 The statute protects "design professionals, 'including inter alia, architects, engineers, contractors, and builders.'" Id. (citing S. Rep. No. 1274, 92nd Cong., 1st Sess. 1 (1972)). Design professionals "have no control over an owner whose neglect in maintaining an improvement that may cause dangerous or unsafe conditions to develop over a period of years." Id. at 121 (citing S. Rep. No. 1274, at 2).

 B. Statute of Limitations for Injuries to Real Property

 Defendants argue that D.C. Code Ann. § 12-301(3) (1995) may operate to bar the Corps' claims. The statute states, in pertinent part,

 
except as otherwise specifically provided by law, actions for the following purposes may not be brought after the expiration of the period specified below from the time the right to maintain the action accrues:
 
(3) for the recovery of damages for an injury to real or personal property-- 3 years...
 
(10) for the recovery of damages for an injury to real property from toxic substances including products containing asbestos-- 5 years from the date the injury is discovered or with reasonable diligence should have been discovered.

 D.C. Code Ann. § 12-301. Defendants posit that the statutory period begins to run from the time a person knows or by the exercise of due diligence should have know of the existence of the cause of action. Because the Complaint was filed on January 19, 1993, the Corps' claim for strict liability is barred if the Corps should have known of the existence of the USTs or the contamination before January 19, 1990. Defendants further maintain that the Corps was put on notice of the potential for contamination by the Briggs Report *fn6" which was issued on December 11, 1989. This analysis, however, is inapplicable when the alleged wrong is of a continuing nature.

 Thus the question of whether the statute bars Plaintiff's claims can be resolved by applying the continuing-tort doctrine. This doctrine holds that "when a tort involves continuing injury, the cause of action accrues, and the limitation period begins to run, at the time the tortious conduct ceases." Page v. United States, 729 F.2d 818, 821, 234 U.S. App. D.C. 332 (D.C. Cir. 1984) (quoting Donaldson v. O'Connor, 493 F.2d 507, 529 (5th Cir. 1974), vacated on other grounds, 422 U.S. 563, 95 S. Ct. ...


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