Opinion
No. 2005-CA-002448-MR.
March 9, 2007.
Appeal from Jefferson Circuit Court Honorable STEPHEN P. RYAN, JUDGE ACTION No. 03-CI-001184.
Kenneth L. Sales, Paul J. Kelley, Louisville, Kentucky, BRIEF FOR APPELLANT.
BRIEF FOR APPELLEES ALUMINUM COMPANY OF AMERICA, INC. (ALCOA); BASF CORPORATION; BLATZ PAINT COMPANY; BLAYLOCK TRUCKING WASTE REMOVAL COMPANY, INC.; CHEMICAL WASTE MANAGEMENT, INC.; CINCINNATI MILACRON, INC.; THE GLIDDEN COMPANY (D/B/A ICI PAINTS); INDUSTRIAL WASTE DISPOSAL CO., INC.; IWD CHEMICAL DISPOSAL OF OHIO; MURRY'S, INC. (MURRY'S COMPANY, INC); OKOLONA SANITATION, INC.; PROGRESS PAINT MANUFACTURING, INC.; REYNOLDS ALUMINUM COMPANY.; REYNOLDS METAL COMPANY.; SCA SERVICES OF KENTUCKY; THE SHERWIN-WILLIAMS COMPANY.; and WASTE MANAGEMENT, INC.:
Dennis J. Conniff, Steven M. Crawford, Amy D. Cubbage, Louisville, Kentucky.
Joseph A. Gregg, Toledo, Ohio., BRIEF FOR APPELLEE LEAR CORPORATION, SUCCESSOR IN INTEREST TO LEAR SIEGLER SEATING CORP.
Dustin E. Meek, Louisville, Kentucky.
J. Matthew Carey, Louisville, Kentucky, BRIEF FOR APPELLEE BOB MONTGOMERY CHEVROLET, INC.
Richard J. Kelber, Mark B. Peterson, Minneapolis, Minnesota, BRIEF FOR APPELLEE PROFORM, INC.
Marcus P. McGraw, Lexington, Kentucky, BRIEF FOR APPELLEES PHELPS DODGE CORPORATION; PPG INDUSTRIES, INC.; PORTER PAINT CO.; and ARKEMA, INC., SUCCESSOR TO M T CHEMICALS, INC.
Heidi B. Goldstein, Erin Alkire, Cleveland, Ohio, BRIEF FOR APPELLEE GOODRICH CORPORATION (F/K/A THE B.F. GOODRICH CO.).
Michael S. Maloney, Louisville, Kentucky, BRIEF FOR APPELLEE OKOLONA SEPTIC TANK SERVICE, INC.
Charles G. Middleton III, Dana L. Collins, Louisville, Kentucky, BRIEF FOR APPELLEE ROBERT BOSCH TOOL CORPORATION (VERMONT AMERICAN CORPORATION AND MULTI-METALS DIVISION OF VERMONT AMERICAN CORPORATION).
Stephen C. Cawood, Pineville, Kentucky, BRIEF FOR APPELLEE MOBIL OIL CORPORATION (N/K/A EXXON MOBIL CORPORATION).
Howard E. Jarvis, Knoxville, Tennessee.
Walter J. Swyers, Jr., Louisville, Kentucky, BRIEF FOR APPELLEE DEHART PAINT VARNISH COMPANY.
Michael L. Maple, Louisville, Kentucky, BRIEF FOR APPELLEE GEORGE M. O'BRYAN.
Thomas T. Terp, Laura R. Ringenbach, Robert B. Craig Cincinnati, Ohio, BRIEF FOR APPELLEES CNA HOLDINGS, INC. (F/K/A HOECHST CELANESE CORPORATION); and THE GOODYEAR TIRE AND RUBBER COMPANY.
BRIEF FOR APPELLEES CSX TRANSPORTATION, INC.; FLEXIBLE MATERIALS, INC.; HONEYWELL INTERNATIONAL, INC. (F/K/A ALLIED-SIGNAL, INC.); SCHERING-PLOUGH HEALTHCARE PRODUCTS, INC. (DR. SCHOLL SHOE COMPANY); and PARO SERVICES CORP. (CHEM-IDYNE CORPORATION, FORMERLY DOING BUSINESS AS ROYAL CHEMICAL COMPANY): Donald Kelly, Louisville, Kentucky.
Matthew Gay, Louisville, Kentucky, BRIEF FOR APPELLEE RMT, INC. (RESIDENTIAL MANAGEMENT TECHNOLOGY, INC.).
James Cooper, Lexington, Kentucky, BRIEF FOR APPELLEE YENKIN-MAJESTIC PAINT CORPORATION.
Charles L. Cunningham, Jr., Louisville, Kentucky, BRIEF FOR APPELLEE MCKESSON CORPORATION.
John D. Edgcomb, Shannon L. Fagan, San Francisco, California.
Philip A. Grashoff, Jr., Bloomfield Hills, Michigan, BRIEF FOR APPELLEE JOSEPH E. SEAGRAM SONS, INC.
BRIEF FOR APPELLEES ATLANTIC RICHFIELD CO.; THE BOC GROUP (A/K/A AIRCO CARBIDE); CELWAVE SYSTEMS, INC.; and GENERAL MOTORS CORPORATION: Harry K. Herren, Jill F. Endicott, Louisville, Kentucky.
Timothy C. Ammer, Cincinnati, Ohio, BRIEF FOR APPELLEE MONARCH MARKING SYSTEMS, INC. (BASE MATERIALS MONARCH SYSTEMS, INC.).
Donna Marron, Alexandria Sylvia, Amy Romig, Indianapolis, Indiana, BRIEF FOR APPELLEE HERITAGE ENVIRONMENTAL SERVICES, INC.
OPINION
AFFIRMING
Under the discovery rule, the statute of limitations begins to run once a party knows or, in the exercise of due diligence, should know of his injury and its cause. In this case, the injury involved the contamination of groundwater which stemmed from soil contamination which occurred more than twenty years preceding the filing of the complaint. The Jefferson Circuit Court correctly held that approximately six years prior to the filing of the complaint, appellant Bulk Terminals, Inc. took actions which indicated sufficient knowledge of both of the injury and its cause to trigger the running of the applicable five-year statute of limitations. We therefore affirm the court's summary judgment dismissing the complaint as untimely.
Between 1970 and 1980, Bulk Terminals leased a parcel of land to Liquid Waste Disposal of Kentucky. Liquid Waste was in the business of receiving waste or by product chemicals which were then either redistilled or incinerated. The appellees are parties which disposed of chemicals at Liquid Waste. In 1979, the federal Environmental Protection Agency (EPA) began to investigate potential soil contamination on the property leased to Liquid Waste. After finding soil contamination, the EPA ordered Liquid Waste to cease treating and disposing of chemicals at the site, and it ordered the removal and clean up of the contaminated soil. According to the record, Bulk Terminals paid approximately ten percent of the total clean up costs, while the appellees paid the remaining costs incurred by the EPA.
In 1995, a contractor who was installing a water line notified Bulk Terminals' owner, Kenneth Helfrich, of a suspicious odor on a portion of the property previously occupied by Liquid Waste. Since Bulk Terminals was winding up its operations on the property in preparation for its potential sale or transfer, it hired environmental consultants to determine whether any contamination was present on the property. Initial tests in November 1996 showed possible contamination, and further tests in early 1997 showed groundwater contamination. In April 1997, Bulk Terminals notified the Kentucky Natural Resources and Environmental Protection Cabinet (Cabinet) of the test results. In addition, on April 17, 1997, Bulk Terminals, through its attorney, wrote its insurance company "to make an environmental contamination claim under comprehensive general liability insurance policies issued . . . to Bulk Terminals from August, 1967 through February 15, 1983." The letter also included the following:
Environmental consultants have conducted initial environmental sampling indicating environmental contamination of Bulk Terminals' property. It is my understanding that there also may be contamination on property adjoining Bulk Terminals' property. Pursuant to Kentucky law, Bulk Terminals is notifying the Commonwealth of Kentucky of the contamination. Because Bulk Terminals believes that Kentucky law will require that the contamination be remediated, it is hereby demanding that Aetna indemnify and reimburse it for all costs associated with said investigation and remediation.
(Emphasis added). In October 1997, Helfrich sent a letter to one of his consultants, stating in part that "there is a possibility that the people who sent material to the [Liquid Waste] site on our property could be assessed for the clean up costs."
In February 2003, Bulk Terminals filed this action alleging, under theories of negligence and nuisance, that the appellees were responsible for the groundwater contamination at the site. After conducting discovery related to the statute of limitations issue, the appellees filed a motion for summary judgment. The Jefferson Circuit Court granted the motion, and Bulk Terminals appeals.
Bulk Terminals argues that under the discovery rule, its cause of action did not accrue until July 1998 when it first knew or should have known that damage had occurred. It asserts that only at this point did the Cabinet and its environmental consultants complete their testing and inform Bulk Terminals that the property was damaged and that remediation would be required.
The parties agree that KRS 413.120(4), the five-year statute of limitations for damage to real property, controls in this case. Contrary to appellees' argument that Kentucky does not adhere to the federal discovery rule in actions involving damage to real property, in Rockwell International Corp. v. Wilhite, 143 S.W.3d 604, 617 (Ky.App. 2003), a panel of the court squarely adopted and applied the discovery rule to actions involving chemical contamination of, and damage to, real property. Under the discovery rule, "`[a] cause of action will not accrue . . . until the plaintiff discovers or in the exercise of reasonable diligence should have discovered not only that he has been injured but also that his injury may have been caused by the defendant's conduct.'" Louisville Trust Co. v. Johns-Manville Products Corp., 580 S.W.2d 497, 501 (Ky. 1979), quoting Raymond v. Eli Lilly Co., 117 N.H. 164, 371 A.2d 170, 174 (1977).
As recognized by the trial court, the real issue in this case is not whether the discovery rule applies, but when Bulk Terminals discovered or, in the exercise of reasonable diligence, should have discovered its injury, i.e., the groundwater contamination. Bulk Terminals argues that it did not know it was injured until July 1998, when its consultants advised it that the contamination would require remediation. We disagree. As noted by the court in Rockwell, "a plaintiff's lack of knowledge as to the extent of his injury does not toll a statute of limitations to which the discovery rule is applied." 143 S.W.3d at 612-13. In this case, the injury was present as far back as 1980, and Bulk Terminals was aware of the renewed concerns about the possibility of contamination at least as early as 1995. Certainly, Bulk Terminals had knowledge that contamination was present when it sent the letter to its insurance company in April 1997, stating that "Kentucky law will require that the contamination be remediated." The trial court did not err in its determination that the statute of limitations started to run no later than April 1997, and that this action therefore was untimely when it was filed in February 2003.
Finally, we cannot agree with Bulk Terminals' argument that the issue of when the statute of limitations began to run should be submitted to a jury. In interpreting the statute of limitations for the discovery rule under the Federal Employers Liability Act in Lipsteuer v. CSX Transp., Inc., 37 S.W.3d 732 (Ky. 2000), the Kentucky Supreme Court stated that the question of when a plaintiff was put on notice about the cause of his injury was an issue of fact to be answered by the fact finder. However, whether that notice occurred within the statutory period of limitations was a question of law. Id. at 737. While Lipsteuer may superficially appear to support Bulk Terminals' contention, we note that the disputed issue in Lipsteuer involved the timing of the plaintiff's notice regarding the cause of his injury. In Lynn Mining Co. v. Kelly, 394 S.W.2d 755, 759 (Ky. 1965), a case relied upon by the court in Lipsteuer, the court admonished that "[w]here the pertinent facts are not in dispute, the validity of the defense of the statute of limitations can and should be determined by the court as a matter of law."
In this case, Bulk Terminals makes no allegation that it was unaware of the cause of the injury. Bulk Terminals alleged in its complaint that the initial contamination occurred between 1970 and 1980. In 1979-80, the EPA conducted extensive remedial clean up of the property, ninety percent of the cost of which was borne by the appellees. Bulk Terminals knew of a suspicious smell on the property in 1995, and the presence of chlorinated solvents was confirmed by January 1997. The initial report of Bulk Terminals' experts in March 1997 was significant enough that Bulk Terminals put its insurance company on notice of the contamination in an April 1997 letter which both unequivocally stated its belief that Kentucky law would require remediation, and demanded indemnification for the costs of investigation and remediation. Under these facts, no reasonable jury could find that Bulk Terminals did not know of its injury in April 1997. The action filed in February 2003 was therefore untimely.
The summary judgment of the Jefferson Circuit Court is affirmed.
ALL CONCUR.