The URL can be used to link to this page

Home My WebLink About2006-5883 Civil (2) PLAZA 21 REALTY ASSOCIATES, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, : PENNSYLVANIA : : : DOCKET NO. 2006-5883-CIVIL TERM : v. : : : EXXON MOBIL CORPORATION and : CIVIL ACTION - LAW PROSPERITY DEVELOPMENT : COMPANY, Defendants IN RE: DEFENDANT PROSPERITY DEVELOPMENT COMPANY’S MOTION FOR SUMMARY JUDGMENT ORDER OF COURT th AND NOW , this 11 day of January, 2010, after consideration of Motion for Summary Judgment by Defendant Prosperity Development Company and Plaintiff’s Response, and oral argument; IT IS HEREBY ORDERED AND DIRECTED that the Defendant’s Motion for GRANTED IN PART DENIED IN PART Summary Judgment is and as follows: GRANTED 1. Summary Judgment is as to Count I, a claim under the Pennsylvania Hazardous Sites Cleanup Act, and Count V, Fraudulent Misrepresentation. DENIED 2. Summary Judgment is for Counts II, III, and IV. By the Court, M. L. Ebert, Jr., J. Eugene E. Dice, Esq. Jan L. Budman II, Esq. Buchanan Ingersoll & Rooney PC 213 Market Street, Third Floor Harrisburg, PA 17101-2121 717-237-4800 Attorneys for Plaintiff Susan J. Smith, Esq. Smith Cartwright, LLP 3009 Market Street Camp Hill, PA 17011 717-763-1650 Attorneys for Defendant Prosperity Development Company 2 PLAZA 21 REALTY ASSOCIATES, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, : PENNSYLVANIA : : : DOCKET NO. 2006-5883-CIVIL TERM : v. : : : EXXON MOBIL CORPORATION and : CIVIL ACTION – LAW PROSPERITY DEVELOPMENT : COMPANY, Defendants IN RE: DEFENDANT PROPSERITY DEVELOPMENT COMPANY’S MOTION FOR SUMMARY JUDGMENT OPINION AND ORDER OF COURT EBERT, J., January 11, 2010 - In this case Plaintiff, Plaza 21 Realty Associates (“Plaza 21”), claims that Defendant Exxon Mobil Corporation (“Exxon Mobil”) caused a leak from a petroleum Underground Storage Tank (UST) and that the leak contaminated Plaintiff’s adjacent property. Plaintiff claims that Defendant Prosperity Development Company (“Prosperity”) is liable for damages based on Prosperity’s prior ownership of the alleged contaminated property and that Prosperity sold the property to Plaintiff without proper disclosure. Plaintiff claims that it was not aware of the contamination until it attempted to sell the property in 2004. At that time Plaintiff claims that the prospective buyer conducted an environmental site assessment and found the property to be contaminated. Plaintiff claims that the results of the environmental assessment prevented the sale and that it suffered losses because of its inability to sell or lease the property until 2006 3 when the Pennsylvania Department of Environmental Protection issued a release of liability for the property. Defendant Prosperity claims that Plaintiff had knowledge of the alleged contamination as early as 1994 and that all claims are barred because any applicable statutes of limitations have expired. Defendant also argues that Plaintiff’s claims under the Pennsylvania Hazardous Sites Cleanup Act (HSCA) must fail because HSCA does not apply to petroleum products. Defendant Prosperity further argues that Plaintiff’s claim of Fraudulent Misrepresentation must fail because Prosperity, in its agreement of sale, disclosed a possible environmental condition to Plaza 21 and provided a due diligence period during which Plaintiff could have conducted investigations of the property. Statement of Facts Plaintiff is a Pennsylvania general partnership with offices located at 1714 North Second Street, Harrisburg, Pennsylvania. Defendant Exxon Mobil is a New Jersey corporation registered to do business in Pennsylvania, with a registered office at 830 Bear Tavern Road, West Trenton, New Jersey. Defendant Prosperity is a Pennsylvania corporation with its principal th place of business at 2525 North 7 Street, Harrisburg, Pennsylvania. In 1986, Plaintiff purchased from Prosperity a building located on the property at 425 st North 21 Street, East Pennsboro Township, Cumberland County, Pennsylvania (“Plaza 21 Property”). At that time, Plaza 21 also obtained a ground lease and a right of first refusal to purchase the underlying land. Plaza 21 exercised this right and purchased the underlying land in 1 January 2004. Exxon Mobil leased the property adjacent and to the east of the Plaza 21 st Property at 407 North 21 Street, East Pennsboro Township, Pennsylvania. On this site Exxon Mobil operated Exxon Station #2-5599 (“Exxon Mobil Property) as a retail gas service station 1 Complaint at ¶14. 4 with underground storage tanks for petroleum products. Defendant Prosperity owned the Exxon Mobil Property and leased it to Exxon. In May 2004, Plaza 21 agreed to sell the entire Plaza 21 Property to a potential buyer, with settlement planned for October 4, 2004. The prospective buyer conducted a Phase I Environmental Site Assessment (ESA) of the Plaza 21 Property which revealed monitoring and 2 remediation efforts by Exxon Mobil and also revealed petroleum hydrocarbon contamination. Plaza 21 and the prospective buyer agreed to conduct a Phase II ESA of the Plaza 21 Property. The potential buyer eventually terminated its sales agreement in late 2004, which Plaintiff claims was a result of the Phase II ESA results. Plaintiff claims that Prosperity, as owner of the Exxon Mobil and Plaza 21 Property, is liable for damages because it was aware of contamination and failed to properly disclose information before it sold the property to Plaza 21. Plaza 21 eventually sold the property to Select Capital Commercial Properties on June 29, 2006 for 3 $3,500,000. Procedural History Plaintiff filed a Writ of Summons on October 6, 2006. Plaintiff then filed a Complaint against Exxon Mobil and Prosperity on January 10, 2007 with claims of violations under the Pennsylvania Hazardous Sites Cleanup Act (HSCA) and the Pennsylvania Storage Tank and Spill Prevention Act (STSPA). Plaintiff also made claims of Trespass and Nuisance against both Defendants. Plaintiff made an additional claim of Fraudulent Misrepresentation against Defendant Prosperity. On July 10, 2009, Defendant Prosperity filed a Motion for Summary Judgment. On August 7, 2009, Plaintiff Plaza 21 filed a Response to Prosperity’s Motion for 2 Complaint at ¶16-17. 3 Walborn Deposition at 67. 5 Summary Judgment. This Court heard argument on Prosperity’s Motion for Summary Judgment on September 9, 2009. Discussion A. Standard of Review Pursuant to Pa. C.S.A. 1035.2, after the relevant pleadings are closed, a party may move for summary judgment in two instances: (1) Whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) If, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. Pa. C.S.A. 1035.2. The Court may grant summary judgment only when the right to such judgment is clear and free from doubt. Sebast v. Kakouras, 915 A.2d 1147, 1153 (Pa. 2007). A Court shall enter judgment whenever there is no genuine issue of any material fact as to a necessary element of a cause of action that could be established by additional discovery. Swords v. Harleysville Ins. Co., 883 A.2d 562, 566 (Pa. 2005). Summary judgment is meant to eliminate the waste of time and resources of both litigants and the courts in . cases where a trial would simply be a useless formalityLiles v. Balmer, 567 A.2d 691, 692 (Pa. Super. 1989). In considering the merits of a motion for summary judgment, a Court views the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. 6 Fine v. Checcio, 870 A.2d 850, 857 (Pa. 2005) (citing Jones v. SEPTA, 772 A.2d 435, 438 (Pa. 2001). In this case questions of material fact remain as to when Plaintiff discovered the contamination. We cannot grant summary judgment in this case on Counts II, III, and IV for the reasons set forth below. However, we find that summary judgment is proper for Counts I and V. B. Count I – Action under the Pennsylvania Hazardous Sites Cleanup Act Plaintiff claims that Exxon Mobil released petroleum hydrocarbons onto the Plaza 21 4 property as a result of leakage from USTs. Plaintiff claims that Defendant Prosperity, as fee 5 owner of the real estate comprising the Exxon Mobil property, is jointly and severally liable. Defendant argues that the contaminants alleged to have contaminated the Plaza 21 property are 6 petroleum hydrocarbons only. While Plaintiff’s complaint does allege that Exxon Mobil caused 7 or allowed petroleum hydrocarbons to be released, Plaintiff also claims that Defendant released 8 “hazardous substances” including but not limited to benzene. Plaintiff claims that the release of such substances is prohibited under HSCA. Hazardous substances as defined by HSCA specifically exclude petroleum and petroleum products. Under the statute, a hazardous substance does not include petroleum or petroleum products, including crude oil or any fraction thereof, which are not otherwise specifically listed or designated as a hazardous substance under paragraph (1); natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel or mixtures of natural gas and synthetic gas usable for fuel; or an element, substance, compound or mixture from a coal mining operation under the jurisdiction of the department or from a site eligible for funding under Title IV of the Surface Mining Control and Reclamation Act of 1977 (Public Law 95-87, 30 U.S.C. § 1201 et seq.).” 4 Complaint at ¶11. 5 Complaint at ¶ 36. 6 Defendant’s Motion for Summary Judgment at ¶ 22. 7 Complaint at ¶11. 8 Plaintiff’s Response to Defendant’s Motion for Summary Judgment at ¶ 22. 7 35 P.S. § 6020.103. It is clear that petroleum products are excluded under HSCA; however, Plaintiff argues that this exclusion does not cover any substance which is designated as a hazardous substance under 35 P.S § 6020.103(1). Benzene is on that list of hazardous substances. While no Pennsylvania case law exists for interpretation of the petroleum exclusion of HSCA, Courts have interpreted the petroleum exclusion under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) commonly known as Superfund. HSCA is a similar statute to CERCLA, and it is likely that Pennsylvania courts would apply the petroleum exclusion in HSCA similarly to the one in CERCLA. See D.L. th9 Martin Mach. Co. v. Loewengart and Co., Inc., 20 Pa. D. & C. 4 520, 528 (Pa. Com. Pl. 1992). The petroleum exclusion in CERCLA has been interpreted to mean that even hazardous substances that are found naturally in crude oil are included in the definition of petroleum for the purposes of the petroleum exclusion. Stepan Chemical Company, 1988 WL 136530 (E.D. Pa. 1988). In Stepan, the court interpreted the petroleum exclusion to include such as crude oil and fractions of crude oil, including the hazardous substances, benzene , which are indigenous in those petroleum substances. Because these hazardous substances are found naturally in all crude oil in its fractions, they must be included in the term ‘petroleum’, for that provision to have any meaning. . . . Id. at *2. (emphasis added). The Environmental Protection Agency’s own interpretation of the scope of the CERCLA petroleum exclusion is that “the petroleum exclusion [applies] to materials such as crude oil, 9 In recognizing a private right of action under HSCA, the court said that “We believe it may fairly be presumed that the General Assembly was aware of the state of the law regarding CERCLA when it patterned the HSCA, in large degree, on the federal legislation.” See 1 Pa.C.S. §1922(4) (providing that “when a court of last resort has construed the language used in a statute the General Assembly in subsequent statutes on the same subject matter intends the same construction to be placed upon such language.”) 8 even if a specifically listed or petroleum feedstocks, and refined petroleum products, designated hazardous substance is present in such products. 1987 WL 123926 (E.P.A.G.C.) (quoting 50 Fed. Reg. 13460 (April 4, 1985) (Emphasis added). “EPA's interpretation of the statute it is charged with enforcing is entitled to considerable deference, and must be adhered to where it is reasonable and consistent with the language of the statute.” U.S. v. Alcan Aluminum Corp., 964 F.2d 252, 262-263 (3d Cir. 1992) (construing Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45 (1984). Following this reasoning, if the alleged leak originated from a tank which contained only petroleum or petroleum products, then the alleged leak would not constitute a claim under HSCA. Plaintiff did not claim that the alleged leak contained anything other than petroleum or petroleum products. The individual elements alleged by Plaintiff are elements of petroleum sufficiently covered under the petroleum exclusion. For the foregoing reasons, we grant summary judgment to Defendant as to Plaintiff’s Count I because the petroleum exclusion precludes a claim under HSCA. C. Questions of Fact Remain about When Plaintiff Discovered Contamination Defendant claims that Plaza 21 had knowledge of the release, investigation, and alleged 10 petroleum hydrocarbon impact to the Plaza 21 property in 1994. However, Plaintiff denies any 11 knowledge at that time and further alleges that Exxon Mobil continued to have responsibility 12 for remediation of the property until 2006. “Whether the statute has run on a claim is usually a question of law for the trial judge, but where the issue involves a factual determination, the determination is for the jury.” Hayward v. Medical Center of Beaver County, 608 A.2d 1040, 1043 (Pa. 1992) (quoting Smith v. Bell 10 Def. Motion for Summary Judgment at ¶ 21. 11 Plaintiff’s Response to Motion for Summary Judgment at ¶ 21. 12 Plaintiff’s Response to Motion for Summary Judgment at ¶ 24. 9 Telephone Co. of Pennsylvania, 153 A.2d 477, 481 (Pa. 1959). “Specifically, the point at which the complaining party should reasonably be aware that he has suffered an injury is generally an issue of fact to be determined by the jury; only where the facts are so clear that reasonable minds cannot differ may the commencement of the limitations period be determined as a matter of law.” Id. at 1043 (quoting Sadtler v. Jackson-Cross Co., 587 A.2d 727, 732) (Pa. Super 1991)). “[T]he statute of limitations begins to run as soon as the right to institute and maintain a suit arises; lack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations.” Hayward v. Medical Center of Beaver County, 608 A.2d 1040, 1042 (Pa. 1992) (quoting Pocono International Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d 468, 471 (Pa. 1983). Plaintiff argues that the discovery rule applies in this case and therefore the statute of limitations was tolled for any causes of action. “The ‘discovery rule’ provides that where the existence of the injury is not known to the complaining party and such knowledge cannot reasonably be ascertained within the prescribed statutory period, the limitations period does not begin to run until the discovery of the injury is reasonably possible.” Hayward v. Medical Center of Beaver County, 608 A.2d 1040, 1043 (Pa. 1992) (quoting Schaffer v. Larzelere, 189 A.2d 267, 269 (Pa. 1963). In holding that the statute of limitations was not tolled in Pocono, the Pennsylvania Supreme Court held that the “discovery rule” exception arises from the inability, despite the exercise of diligence to determine the injury or its cause, not upon a retrospective view of whether the facts were actually ascertained within the period. Pocono, 468 A.2d at 471- 472. 10 In a letter dated December 1, 1994, Plaintiff received a letter from an environmental 13 consultant, R.E. Wright Associates, Inc. (“R.E.W.”). R.E.W. visited the site on November 23, 1994, to investigate the presence of hydrocarbons which were encountered during the excavation 14 of subgrade trenches in the ground floor of the Plaza 21 building. R.E.W.’s report identified “an existing Exxon station located approximately 90 feet toward the west of the building” as “a 15 suspected source” of hydrocarbons. Ronald Walborn stated in his deposition that Plaza 21 was aware that the Pennsylvania Department of Environmental Quality (PADEP) was conducting an investigation related to the 16 Exxon station adjacent to the Plaza 21 property. He said he was aware that contaminated soil 17 was removed and that a monitoring system was installed to monitor the air vapors. Based on this information, Defendant claims that Plaintiff was aware of contamination on the Plaza 21 property in 1994. However, Plaintiff claims that they could not have discovered the alleged contamination in 1994 because it did not own the property at that time and did not have the 18 authority to conduct further testing. Plaintiff also claims that even though they were aware of vapors or fumes in the building in 1994, the results of monitoring at that time did not reveal unsafe levels of contaminants and therefore they argue that they could not have known the extent of the alleged contamination of the property. The Pennsylvania Superior Court has held that “ordinarily most questions relating to the applicability of the defense of the statute of limitations are questions of fact to be determined by the jury.” Taylor v. Tukanowicz, 435 A.2d 181, 183 (Pa. Super. 1981) (citations omitted). 13 Ex. J 14 Ex. J at 1. 15 Ex. J. at 3. 16 Deposition of Ronald E. Walborn at 34-37. 17 Deposition of Ronald E. Walborn at 34-37. 18 Plaintiff’s Answer to Defendant’s Motion for Summary Judgment at ¶36. 11 Specifically, the question of whether a Plaintiff has exercised due diligence in discovering the incidence of his injury is usually a jury question. Id. (quoting Irrera v. Southeastern Pennsylvania Transportation Authority, 331 A.2d 705 (Pa. Super. 1974). “Whether the statute has run on a claim is usually a question of law for the judge, but where, as here, the issue involves a factual determination, i.e. what is a reasonable period, the determination is for the jury.” Id. (quoting Smith v. Bell Telephone Company of Pennsylvania, 153 A.2d 477, 479 (Pa. 1959). Resolving any doubts in favor of the non-moving party, there exists a genuine issue of fact regarding when Plaintiff could have reasonably discovered the alleged contamination of the property. Therefore, we cannot grant summary judgment for Plaintiff’s claims II, III, and IV because all are dependent on Plaintiff’s discovery of the alleged damage to Plaza 21 property. D. Fraudulent Misrepresentation Plaintiff claims that Defendant Prosperity knew of petroleum contamination of the 19 Plaza 21 property when the land was conveyed to Plaintiff in January 2004. Plaintiff further claims that Defendant Prosperity intentionally or negligently withheld from Plaza 21 the information of the contamination and that this information would have either prevented the sale 20 or caused a material change in the purchase price of the Plaza 21 property. The elements necessary for making a fraudulent misrepresentation claim are: (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) resulting injury. Boyd v. Rockwood Area School Dist., 907 A.2d 1157, 1170 (Pa.Commw.Ct. 2006). 19 Complaint at ¶ 62. 20 Complaint at ¶ 63-64. 12 Prosperity and Plaza 21 entered into an Agreement of Sale on August 11, 2003, for the purchase of the Plaza 21 property. The Agreement at paragraph 23 contained a disclosure notifying Plaza 21 of a “possible environmental condition” and Prosperity agreed to provide Plaza 21 with all of 21 the assessments relating to the possible condition. The agreement also provided a due diligence period of sixty days for Plaza 21 to perform examinations, inspections, or investigations of the property. This provision gave Plaza 21 the right to terminate the sale based 22 upon the results of any of the inspections. Prosperity disclosed the possibility of an environmental condition to Plaza 21 at the time of sale and allowed them a due diligence period during which to conduct any further investigations and review existing records. We find that there cannot be a misrepresentation with an intent to mislead when Defendant clearly provided information to Plaintiff and invited further investigations. Summary judgment with respect to Plaintiff’s Fraudulent Misrepresentation claim is properly granted in this case. Accordingly, Defendant’s Motion is GRANTED in part and DENIED in part. Therefore, the following Order shall be entered: ORDER OF COURT th AND NOW , this 11 day of January, 2010, after consideration of Motion for Summary Judgment by Defendant Prosperity Development Company and Plaintiff’s Answer, and oral argument; IT IS HEREBY ORDERED AND DIRECTED that the Defendant’s Motion for GRANTED IN PART DENIED IN PART Summary Judgment is and as follows: 21 Agreement of Sale at ¶ 23. 22 Agreement of Sale at ¶ 11. 13 GRANTED 1. Summary Judgment is as to Count I, a claim under the Pennsylvania Hazardous Sites Cleanup Act, and Count V, Fraudulent Misrepresentation. DENIED 2. Summary Judgment is for Counts II, III, and IV. By the Court, M. L. Ebert, Jr., J. Eugene E. Dice, Esq. Jan L. Budman II, Esq. Buchanan Ingersoll & Rooney PC 213 Market Street, Third Floor Harrisburg, PA 17101-2121 717-237-4800 Attorneys for Plaintiff Susan J. Smith, Esq. Smith Cartwright, LLP 3009 Market Street Camp Hill, PA 17011 717-763-1650 Attorneys for Defendant Prosperity Development Company 14