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HomeMy WebLinkAbout2006-5883 PLAZA 21 REALTY ASSOCIATES, : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : EXXONMOBIL CORPORATION AND : PROSPERITY DEVELOPMENT : COMPANY, : DEFENDANTS : NO. 06-5883 CIVIL IN RE: PLAZA 21 REALTY ASSOCIATES’ MOTION FOR LITIGATION COSTS AND FEES ORDER OF COURT th AND NOW , this 9 day of January, 2012, upon consideration of Plaza 21 Realty Associates’ Motion for Litigation Costs and Fees, Defendant Prosperity Development Company’s Answer and Reply in Opposition and the briefs filed by the Parties; IT IS HEREBY ORDERED AND DIRECTED that Plaza 21 Realty Associates’ DENIED Motion for Litigation Costs and Fees 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 2 PLAZA 21 REALTY ASSOCIATES, : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : EXXONMOBIL CORPORATION AND : PROSPERITY DEVELOPMENT : COMPANY, : DEFENDANTS : NO. 06-5883 CIVIL IN RE: PLAZA 21 REALTY ASSOCIATES’ MOTION FOR LITIGATION COSTS AND FEES OPINION AND ORDER OF COURT EBERT, J., January 9, 2012- Plaintiff in this case has filed a Post-Trial Motion for Litigation Costs and Fees (“Motion”). This Motion was filed after a civil jury trial involving Plaintiff’s claims against Defendants Prosperity and ExxonMobil for violation of the Pennsylvania Storage Tank and Spill Prevention Act (“STSPA”), 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, Section 1305(f) of the STSPA allows for a court to shift the fees and costs when appropriate. The issue before this Court is whether fee-shifting is appropriate and if appropriate, how much is warranted. 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 an office at 830 Bear Tavern Road, West Trenton, New Jersey. Defendant 1 Prosperity Company (“Prosperity” or “Defendant”) is a Pennsylvania corporation with its th principal 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 of 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 of 2004, Plaza 21 agreed to sell the entire Plaza 21 Property to a potential buyer for a sale price of $3,500,000 with the closing planned for October 4, 2004. In the summer of 1 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 2 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 sale agreement during the latter part of 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 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 the storage tanks on the ExxonMobil Property, was responsible for leaks from underground storage tanks and contamination of the Plaza 21 Property as a result of the leaks. On June 28, 2006, the Pennsylvania Department of Environmental 1 Deposition of Ronald Walborn, Feb. 28, 2008, at 71. 2 Complaint ¶ 16. 2 Protection (“DEP”) issued a letter stating that the remedial actions taken on the site met the 3 established cleanup standards. Plaza 21 sold the property on June 29, 2006, for $3,500,000. Plaintiff’s claims under the STSPA sought damages for environmental management consulting and legal fees in the amount of $116,162.73 between the time periods from October 4 of 2004 through June of 2006. Also, Plaintiff sought damages for calculable loss investment in 5 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 pending due to 6 the possibility of substantial environmental cleanup.” (emphasis added). Moreover, 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 remedial 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 Plaza 21 Property successfully sold in 2006 after the Pennsylvania DEP confirmed that remediation was complete. 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 STSPA, 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 STSPA, Trespass, and Nuisance. On July 10, 2009, Defendant Prosperity filed a Motion for Summary Judgment which was granted as 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 to the HSCA and Fraudulent Misrepresentation claims, but denied as to claims under the STSPA, Trespass, and Nuisance. On February 2, 2011, a jury found in favor of Plaintiff for the STSPA claims and 7 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 caused 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 a Post-Trial Motion for Delay Damages which this Court denied on June 8, 2011. On October 21, 2011, Plaintiff filed a Motion for Litigation Costs and Fees. Discussion The Pennsylvania Supreme Court in Centolanza v. Lehigh Valley Dairies, Inc. addressed the legislative intent of the STSPA: The STSPA is a remedial statute. This Court has held that ambiguous language of a remedial act must be liberally construed. According to the Pennsylvania General Assembly, storage tank releases are a threat to the public health and safety of this Commonwealth. To protect the public health and safety, the General Assembly established a regulatory scheme for the storage of regulated substances in new and existing storage tanks. Moreover, the legislature provided liability for damages sustained within the Commonwealth as a result of a release. Finally, the legislation requires prompt cleanup and removal of such pollution and released regulated substances. 658 A.2d 336, 340 (Pa. 1995) (internal citations omitted). In Centolanza, the Supreme Court held that under the STSPA, specifically Section 1305 - “Suits to abate nuisances and restrain violations” - an “action may be brought to collect costs for cleanup and diminution in property value.” Id.; see also Bruni v. Exxon Corp., 52 Pa. D. & C..4th 484, 493 (Pa. Com. Pl. 2001). In interpreting the STSPA language, the Centolanza court “did not indicate those damages were 7 ExxonMobil as a Defendant had previously settled with Plaintiff Plaza 21 before trial and by admission of Plaintiff is no longer liable for damages and fees sought. See Pl.’s Brief in Support of Motion, filed Oct. 21, 2011, at 2 section II. 4 exclusive” and “lower Pennsylvania courts have also allowed for recovery of personal injury damages.” F.P. Woll & Company v. Fifth and Mitchell Street Corp., 2009 WL 1204548 at *2 (C.A.3). Pursuant to Section 1305(f) of the STSPA, a trial court may award the fees and costs of litigation (“costs”) to any party. The Section provides as follows: Fees and costs.-- The court, in issuing any final order in any action brought may pursuant to this section, award costs of litigation (including attorney and whenever the court determines such award is expert witness fees) to any party, appropriate . 35 P.S. § 6021.1305(f) (emphasis added). The Superior Court’s close analysis of the STSPA, and specifically Section 1305(f), in Krebs v. United Refining Co. of Pa. provides guidance in determining whether an award of costs to a party is warranted. See 893 A.2d 776 (Pa. Super. 2006). Since the STSPA gives no guidance as to when it is “appropriate” to award attorneys’ fees and costs under Section 1305(f), we are also required to construe this provision liberally, so that Section 1305(f) has the requisite “teeth” to help STSPA’s goals of preventing, providing liability for, and collecting realize the costs of cleanup related to storage tank spills in the Commonwealth. Id. at 788 (emphasis added). In Krebs, the Superior Court outlined eight principle findings regarding the STSPA and awarding costs to a successful plaintiff. Id. at 791. For the purpose of the case sub judice, principles two, three, four, five, six, and seven outlined in Krebs are instructive in determining whether costs are warranted. Principle two states that the decision to award costs “rests in the sound discretion of the trial court” and only should be awarded in “appropriate circumstances.” Id. Principle three states that the appropriateness should be based on whether “attorneys’ fees and costs would promote the purposes of the STSPA” in a case-by-case analysis. Id. Principle four states that the purposes of the STSPA “include the protection of the public health and safety by providing for, among other things, 5 liability for damages sustained from tank releases and prompt cleanup and removal of pollution resulting from such releases.” Id. Principle five states that one consideration of appropriateness in shifting attorneys’ fees and costs is to “ensure vigorous enforcement of the STSPA and to attract competent counsel who might otherwise reject similar claims.” Id. Principle six states that an appropriate award of costs should not be based on the size of the verdict, but rather on the degree of success. Id. Lastly, principle seven states that the method for determining an award of costs under Section 1305(f) is the “lodestar approach, whereby the lodestar figure may be adjusted, in the discretion of the trial court, in light of the degree of success, the potential public benefit achieved, and the potential inadequacy of the private fee arrangement.” Id. However, even when a remedial statute such as STSPA allows for a trial court’s discretion in awarding costs when appropriate, there are situations where reducing an award of costs is warranted. Id. at 792. The Superior Court in Logan v. Marks, an appeal from a denial of attorney fees and litigation expenses related to a Section 1983 case under Section 1988, cited to the United States Supreme Court case of Hensley v. Eckerhart in determining when reduction of 8 costs is appropriate based upon the level of success of a plaintiff’s claims. 704 A.2d 671, 674 (Pa. Super. 1997) (citing 461 U.S. 424 (1983)). Further elaborating on the decision in Logan, the Krebs court acknowledged other factors that a trial court can consider in cases under the STSPA when determining if a reduction of an award of costs is appropriate. Krebs, 893 A.2d at 793. The Krebs court noted that “the United States Supreme Court warned against an undesirable emphasis on the recovery of damages in 8 The Hensley court stated that a lower court determining an award of attorneys’ fees “should focus on the significance of the overall relief obtained by the plaintiff in relation to hours reasonably expended on litigation[,]” but also noted that “Congress has not authorized an award of fees whenever it was reasonable for a plaintiff to bring a lawsuit or whenever conscientious counsel tried the case with devotion and skill.” 461 U.S. 424, 434-37 (1983). Thus, reiterating that “the most critical factor [in determining an award] is the degree of success obtained.” Id. at 436. 6 fee-shifting cases, at the expense of focusing upon the intent of the statute.” Id. at 790. Specifically, the Krebs court mentioned defendant’s “immediate remedial action” to a STSPA violation and how defendant’s “remediation efforts complied with all applicable DEP requirements” as “legitimate factors for a trial court to consider in arriving at an appropriate award of attorneys’ fees and costs under Section 1305(f).” Id. at 793. Thus, Krebs suggests that “legitimate factors,” such as Defendant’s remediation efforts and compliance with DEP requirements in the present case, may be used to reduce any possible award of costs. See id. Taking into consideration the principles outlined in Krebs and applying those principles to the case sub judice, this Court finds that an award of Section 1305(f) attorneys’ fees and litigation costs to be inappropriate. This Court finds that, based on an analysis of the record, in light of the jury’s verdict, the Plaintiff’s success at trial was minimal overall. Plaintiff’s Motion for an award of costs in the amount of $351,475.93 does not promote the purposes of the STSPA. Although the underlying cause of action was based on a spill violation of the STSPA, Plaintiff only sought damages relating to the expense of environmental and legal consultants used in determining the saleability of the affected Plaza 21 Property. Any actual damage to Plaza 21 Property had already been, or was in the process of being remediated. In fact, the DEP never ordered any additional remedial measures such as removal of soil, cleansing of ground water, or collection or disposal of vapors from the ExxonMobil Property or the Plaza 21 Property. Furthermore, on June 28, 2006, the DEP issued a letter stating the remedial actions taken on-site were in compliance and met the established cleanup standards. Additionally, the jury’s verdict, in favor of Plaintiff but awarding no additional damages for Nuisance and Trespass, reflect the conclusion that Defendants did not cause additional harm beyond the cost of environmental and legal consulting fees (“consulting fees”). The claims 7 brought by Plaintiff, DEP’s letter, and jury verdict all reflect that damage to the surrounding properties had been remediated through Defendants’ actions. The jury had already awarded Plaintiff $50,475.93 for the “costs of cleanup” as it related to the environmental and legal consulting that was needed to determine no further cleanup was necessary. See In Re: Plaintiff’s Post-Trial Motion For Delay Damages Opinion and Order of Court, June 8, 2011, at 5-6. An award of Plaintiff’s prayer for $351,475.93, above-and-beyond the jury’s verdict would put an “undesirable emphasis on the recovery of damages in fee-shifting cases, at the expense of focusing upon the intent of the statute.” Krebs, 893 A.2d at 790. In the present case, shifting additional costs to Defendant will have little-to-no effect in promoting the intent of the 9 STSPA in preventing future spills, holding Defendants liable, and collecting costs for cleanup. The STSPA’s intent had already been fulfilled even before Plaintiff’s claims were filed. Prior to Plaintiff’s claims, Defendants had already remediated the spill to a level in compliance with the DEP and no damage resulting in the diminution of property value occurred, as evidenced by the jury’s verdict. Therefore, the potential for deterrence of future spills, holding Defendants liable, 9 A portion of the prayed for amount in costs and fees parallels a situation presented in F.P. Woll & Co. v. Fifth and Mitchell Street Corp. because the jury’s verdict had already taken into account those costs and fees requested. See 2009 WL 1204548 (C.A. 3). The Third Circuit persuasively argues in F.P. Woll that although the Centolanza court liberally construed the STSPA to include various types of damages, those recoverable damages are not without limitation in promoting the purpose of the statute. The Third Circuit explained, “Centolanza, [ ] made clear that the damages recoverable under the STSPA only reach as far as necessary to promote the goal of the Act-the prompt clean-up of spills. Damages for diminution in property value, which typically approximate lost proceeds, serve this purpose and are already recoverable. The jury considered diminution in property value in determining its damages Duplicating this element of damages would produce a windfall, not promote prompt clean-up award. .” Id. at *1 (emphasis added). While analyzing an alternative claim of tortious interference with contract, the Third Circuit found that the STSPA claim had already taken into account the damages associated with the “diminution in property value” thus, “duplicating” that element of damages would not promote the intent of the statute. See id. Extending the Third Circuit’s reasoning to Section 1305(f) and taking into account the jury’s verdict in this particular case – accepting consulting and legal fees as part of the recoverable damages for “cleanup” costs pursuant to a liberal construction of the STSPA - an award of legal costs under Section 1305(f) in addition to the verdict would be analogous to a duplication of an award and fail to promote the intent of the statute. See generally id. This Court notes that the Third Circuit’s opinion in F.P. Woll is not controlling. Additionally, since this Court has made a determination that all costs and fees are inappropriate in this specific case the reasoning in F.P. Woll, to deny a duplication of an award for a portion of the prayed for amount indicated supra, is not applicable. 8 and the costs of cleanup have already been achieved. Further awards of costs under Section 1305(f) are inappropriate under the specific circumstances of this case. Conclusion This Court finds that Plaintiff’s degree of success, as well as the potential public benefit achieved, is minimal. A denial of an award of costs reflects the limited success and public benefit of Plaintiff’s STSPA claim against Defendants. Therefore, applying the eight principles outlined in Krebs to this specific case, this Court finds an award of costs to Plaintiff under Section 1305(f) to be inappropriate. Accordingly, the following Order is entered: th AND NOW , this 9 day of January, 2012, upon consideration of Plaza 21 Realty Associates’ Motion for Litigation Costs and Fees, Defendant Prosperity Development Company’s Answer and Reply in Opposition and the briefs filed by the Parties; IT IS HEREBY ORDERED AND DIRECTED that Plaza 21 Realty Associates’ DENIED Motion for Litigation Costs and Fees 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 9 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 10