Loading...
HomeMy WebLinkAbout2006-5883 CIVIL PLAZA 21 REALTY ASSOCIATES, : IN THE COURT OF COMMON PLEAS Plaintiff : CUMBERLAND COUNTY, : PENNSYLVANIA : : : DOCKET NO. 2006-5883-CIVIL : v. : : : EXXONMOBIL CORPORATION and : PROSPERITY DEVELOPMENT : COMPANY, Defendants IN RE: PLAINTIFF’S POST-TRIAL MOTION FOR DELAY DAMAGES OPINION AND ORDER OF COURT EBERT, J., June 8, 2011 - Plaintiff in this case has filed a Post-Trial Motion for Delay Damages pursuant to Pennsylvania Rules of Civil Procedure Rule 238. This Motion was filed after a civil jury trial involving claims by Plaintiff against Defendants Prosperity and ExxonMobil for violation of the Pennsylvania Storage Tank and Spill Prevention Act (“Tank Act”) as well as claims for Trespass and Nuisance. All claims were based on damages for lost profits or professional fees including environmental consulting and/or legal fees. On February 2, 2011, a jury returned a verdict in favor of Plaintiff and awarded damages totaling $50,475.93 against Defendants. As discussed below, the language of Rule 238 is clear that delay damages are only allowed for cases involving damages for bodily injury, death, or property damage. Because the damages in this case were awarded for legal fees and consulting services, we will not award delay damages. 1 Statement of Facts Plaintiff Plaza 21 Realty Associates (“Plaza 21”) is a Pennsylvania general partnership with offices located at 1714 North Second Street, Harrisburg, Pennsylvania. Defendant Exxon Mobil Corporation (“ExxonMobil”) 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 Company (“Prosperity”) is a Pennsylvania corporation with its principal th place of business at 2525 North 7 Street, Harrisburg, Pennsylvania. In 1986, Plaza 21 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 January 2004. ExxonMobil leased the property adjacent to and to the east of the Plaza 21 st Property at 407 North 21 Street, East Pennsboro Township, Pennsylvania, Exxon Station #2- 5599 (“ExxonMobil Property”). In May 2004, Plaza 21 agreed to sell the entire Plaza 21 Property to a potential buyer for 1 a sale price of $3,500,000 with settlement planned for October 4, 2004. In the summer of 2004, the prospective buyer conducted a Phase I Environmental Site Assessment (ESA) of the Plaza 21 Property which revealed monitoring and remediation efforts by ExxonMobil and also revealed 2 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 sale agreement in late 2004, which Plaintiff claimed was a result of the Phase II ESA results. Plaintiff claimed that Defendant Prosperity, as owner of both the ExxonMobil and Plaza 21 Property, was 1 Deposition of Ronald Walborn, Feb. 28, 2008, p. 71. 2 Complaint at ¶ 16. 2 liable for damages because it was aware of contamination and failed to properly disclose information before it sold the property to Plaza 21. Plaintiff claimed that Defendant ExxonMobil, as the operator of storage tanks on the ExxonMobil Property, was responsible for leaks from underground storage tanks (USTs) and contamination of the Plaza 21 Property as a result of the leaks. On June 28, 2006, the Pennsylvania Department of Environmental Protection (“DEP”) issued a letter stating that the remediation actions taken on the site met the established cleanup 3 standards. Plaza 21 sold the property on June 29, 2006, for $3,500,000. Plaintiff’s claims under the Tank Act sought damages for environmental and management consulting and legal fees in the amount of $116,162.73 between the period of 4 October 2004 through June 2006. Plaintiff also sought damages for calculable loss investment 5 damages in the amount of $178,661.05. In addition, Plaintiff sought “delay damages based on the time value of the money lost to Plaza 21 Associates, while the Plaza 21 Property sale was 6 pending due to the possibility of substantial environmental cleanup.” (emphasis added). Plaintiff sought damages for costs incurred for analysis of the property after the Phase I ESA, and for Plaintiff’s alleged inability to rent or sell the land prior to DEP’s approval of remediation efforts on the property. Claims were not based on any actual damage to the Plaza 21 property. The Phase I ESA simply revealed the existence of remediation. The property successfully sold in 2006 after the Pennsylvania DEP confirmed that remediation was complete. 3 Deposition Exhibit 12, Letter from Pennsylvania Department of Environmental Protection, June 28, 2006. 4 Complaint, ¶ 34. 5 Complaint, ¶ 47. 6 Complaint, ¶ 50 (c). 3 In fact, DEP never ordered any remedial measures such as removal of soil, cleansing of ground water, or collection or disposal of vapors from the Exxon property or the Plaza 21 7 property. Procedural History Plaintiff filed a Writ of Summons against Defendants on October 6, 2006. Plaintiff then filed a Complaint on January 10, 2007, with claims of violations under the Pennsylvania Hazardous Sites Cleanup Act (“HSCA”) and the Tank Act, as well as claims of Trespass and Nuisance. Plaintiff also claimed Fraudulent Misrepresentation against Defendant Prosperity. On June 1, 2009, Defendant ExxonMobil filed a Motion for Summary Judgment, which was granted as to the HSCA claim, and denied as to claims under the Tank Act, Trespass, and Nuisance. On July 10, 2009, Defendant Prosperity filed a Motion for Summary Judgment which was granted as to the HSCA and Fraudulent Misrepresentation claims and denied as to claims under the Tank Act, Trespass, and Nuisance. On February 2, 2011, a jury found in favor of Plaintiff for the Tank Act claims and awarded damages totaling $50, 475.93 against Defendants. The jury also found in favor of Plaintiff for the Trespass and Nuisance claims, but found that no harm was cause to Plaintiff as a result. On February 10, 2011, Defendant Prosperity Development Co. (“Prosperity”) filed a Motion for Post-Trial Relief, which this court denied on May 23, 2011. On February 14, 2011, Plaintiff filed this Post-Trial Motion for Delay Damages. For the reasons below, we deny Plaintiff’s Motion for Delay Damages. 7 Notes of Testimony, p. 111-13. 4 Discussion Rule 238 of the Pennsylvania Rules of Civil Procedure provides (a)(1) At the request of the plaintiff in a civil action seeking monetary relief for bodily injury, death or property damage, damages for delay shall be added to the amount of compensatory damages awarded against each defendant or additional defendant found to be liable to the plaintiff in the verdict of a jury, in the decision of the court in a nonjury trial or in the award of arbitrators appointed under section 7361 of the Judicial Code, 42 Pa.C.S. § 7361, and shall become part of the verdict, decision or award. Pa. R.C.P. 238. (emphasis added). Rule 238 permits delay damages only when the Plaintiff seeks monetary relief for bodily injury, death, or property damage. Plaintiff’s complaint sought damages only for environmental and management consulting and legal fees and for loss investment damages. The underlying cause of damages sought was based on the possibility of environmental cleanup on the property, but no further cleanup was required; therefore, Plaintiff did not seek monetary relief for any property damage. The leakage on the property was remediated and being monitored, which Plaintiffs claim caused a delay in the sale of the property. The property ultimately sold on the day after DEP issued a letter indicating that the site was in compliance with acceptable standards. Clearly there was no property damage that caused any harm to Plaintiff, since no additional work needed to be done to the property to sell it at the original sale price. The jury found in favor of Plaintiff for claims under the Tank Act and awarded $50,475.93, and apportioned 75% liability to Defendant ExxonMobil and 25% liability to Defendant Prosperity. Evidence submitted by Plaintiff includes bills for charges incurred by Plaintiff for environmental consulting from Rettew Associates, Inc. for $38,183.32 and for charges incurred for legal services from Stevens & Lee for $12,292.61. Together, these total the jury’s award of $50,475.93. Plaintiff did not seek, and the jury did not award, damages for 5 anything other than fees for legal and consulting services. It is important to note that although the jury found in favor of Plaintiff on Nuisance and Trespass claims, the jury also found that no harm to Plaintiff was caused by Defendants as a result of these torts. The Pennsylvania Superior Court has stated that “[t]he rule is explicitly limited by its own language . . . .” Rizzo v. Haynes, 515 A.2d 321, 325 (Pa. Super. 1986) (rule not applicable to action for legal malpractice, even when underlying cases were actions for personal injury). Also, in Melley v. Pioneer Bank, the court stated that “[w]ith regard to delay damages, we first note the obvious, Pa.R.Civ.P. 238, Damages for Delay in actions for Bodily Injury, Death or Property Damage, applies only to certain civil actions, i.e. tort claims for bodily injury, death or property damage.” Melley v. Pioneer Bank, 834 A.2d 1191, 1203 (Pa. Super. 2003) (emphasis added). Construing Rule 238 narrowly, the Pennsylvania Supreme Court determined that the rule did not apply where property damage occurred as a result of a contract action. Touloumes v. E.S.C., Inc., 899 A.2d 343 (Pa. 2006). In Touloumes, the Pennsylvania Supreme Court upheld the trial court’s denial of delay damages after a verdict in favor of plaintiff Holly Inn when the defendant roofing contractor breached a contract by failing to install a roof in a workmanlike manner. The Supreme Court reasoned that even though the damages were measurable by actual property damage, delay damages were not available in a breach of contract claim. Although not directly analogous to the present case, we apply the Supreme Court’s reasoning that Rule 238 should be construed narrowly and should only apply to actions seeking monetary relief for bodily injury, death, or property damage. Even in Touloumes, when actual property damage did exist, the court still did not award delay damages when the relief sought was based on a breach of contract claim. 6 In the present case, while the underlying cause of action was based on violation of the Tank Act and previous property damage, the relief sought was not for any property damage or loss in value of the property. Plaintiff’s claims were based on expenditures for assessment of property damage under the Tank Act, Trespass, and Nuisance; any actual property damage had been or was being remediated and no damages were sought in connection with property damage. The only damages sought were related to expenses for environmental consulting and legal fees to perform analysis on the property to determine its saleability. See Complaint, ¶ 46. Plaintiff successfully sold the property on June 29, 2006, without any further remediation or any costs incurred for remediation. The sale price of $3,500,000 was the same as the original sale price set in 2004 and there was no evidence presented that there was any decline in the value of the property. Plaintiffs only sought damages for the loss of profits due to the delay in rental or sale during 2004 and 2006 while the analysis of the property was being completed. Relief sought and awarded was for consulting and legal fees, not property damage. Conclusion Plaintiff did not seek damages based on any of the causes of action specifically referred to in Rule 238. Pennsylvania courts have made it clear that the rule is limited to the causes of action explicitly stated in the rule. Plaintiff sought and was awarded damages only for costs incurred to analyze the status of remediation efforts on the property. Accordingly, we deny Plaintiff’s Post-Trial Motion for Delay Damages. ORDER OF COURT th AND NOW , this 8 day of June, 2011, after consideration of Plaintiff’s Post-Trial Motion for Delay Damages and review of the record in this case, 7 IT IS HEREBY ORDERED AND DIRECTED that the Plaintiff’s Post-Trial Motion DENIED. for Delay Damages is 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 Marc A. Rollo, Esq. Adam P. Bass, Esq. Archer & Greiner One South Broad Street, Suite 1620 Philadelphia, PA 19107 215-963-3300 Attorneys for Defendant ExxonMobil Susan J. Smith, Esq. Smith Cartwright, LLP 3009 Market Street Camp Hill, PA 17011 For Defendant Prosperity Development Company David Fitzsimons, Esquire 10 East High Street Carlisle, PA 17013 For Defendant Prosperity Development Company 8