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ALLOY BRIQUETTING CORP. v. NIAGARA VEST

February 14, 1991

ALLOY BRIQUETTING CORPORATION, PLAINTIFF,
v.
NIAGARA VEST, INC. AND UNION CARBIDE CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Skretny, District Judge.

  DECISION AND ORDER

Defendant Union Carbide Corporation ("Union Carbide") brings this motion pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), for an order dismissing plaintiff's First through Seventh Claims for Relief. In support of its motion, Union Carbide submits the affidavit of Thomas E. Reidy, Esq. and the Exhibits annexed thereto ("Reidy affidavit"), a memorandum of law dated October 15, 1990 and a supplemental memorandum of law dated December 10, 1990.

Defendant Niagara Vest, Inc. ("Niagara Vest") joins in Union Carbide's motion and also brings a separate motion pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), for an order dismissing plaintiff's complaint in its entirety. In support of its motion, Niagara Vest submits the affidavit of Mark R. McNamara, Esq. and the Exhibits annexed thereto ("McNamara affidavit") and the reply affidavit of Mark R. McNamara, Esq. and the Exhibits annexed thereto ("McNamara Reply affidavit").

In opposition to the motions, plaintiff Alloy Briquetting Corporation submits the affidavit of Richard G. Collins, Esq., the affidavit of John J. DelMonte, Esq. and the Exhibits annexed thereto ("DelMonte affidavit"), the affidavit of Donald W. Vickrey and a memorandum of law dated December 3, 1990.*fn1

I have also considered oral argument heard on December 17, 1990.

Conclusion: For the reasons discussed below, Union Carbide's motion for an order dismissing plaintiff's First through Fifth and Seventh Claims for Relief is GRANTED in part and DENIED in part, and as to the Sixth Claim for Relief, summary judgment is GRANTED, as limited and as more fully set forth herein; and Niagara Vest's motion for an order dismissing plaintiff's complaint in its entirety as to the First through Fifth and Seventh Claims for Relief is GRANTED in part and DENIED in part, as to the Sixth Claim for Relief, summary judgment is GRANTED as limited herein, and as to the Eighth Claim for Relief, summary judgment is DENIED.

FACTS

Plaintiff commenced this action on August 1, 1990, seeking to recover, under various federal and state law theories, the costs plaintiff allegedly has incurred or will incur to clean up the alleged chemical contamination of certain property located in Niagara Falls, New York (the "Site"). Jurisdiction is predicated on 28 U.S.C. § 1331, § 113(b) of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9613(b), and this Court's pendent jurisdiction.

Plaintiff's complaint alleges that it currently leases the Site from Niagara Vest, the current owner of the Site. Plaintiff's alleged status as lessee arises pursuant to two instruments: (1) an Agreement of Sale between plaintiff and Niagara Vest, dated July 1, 1988 (the "Agreement"), copies of which are attached to the DelMonte affidavit as Exhibit A, the McNamara affidavit as Exhibit A and the McNamara Reply affidavit as Exhibit B, and (2) a Lease between plaintiff and Niagara Vest, undated, (the "Lease"), copies of which are attached to the DelMonte affidavit as Exhibit B, the McNamara affidavit as Exhibit B and the McNamara Reply affidavit as Exhibit C. The Site is comprised of the combined tract of land which is the subject of the Agreement and the Lease.

Pursuant to the Agreement, Niagara Vest agreed to sell and plaintiff agreed to purchase "Building 24" and "Building 1 Extension," along with certain vacant land on a tract of land which was formerly the Union Carbide Republic Plant. However, the transaction contemplated in the Agreement could not close until Niagara Vest obtained appropriate subdivision approval. Until Niagara Vest could do so, the Agreement was to be converted to, and act as*fn2, a Lease Agreement pursuant to paragraph 6 thereof, under which plaintiff was permitted to occupy the subject premises as a tenant and was obliged to pay rent on a monthly basis, until such time as Niagara Vest obtained the subdivision approval and the closing was completed, up to a period of ten years. Apparently, Niagara Vest never obtained the subdivision approval, and the Agreement has been operating as a Lease Agreement, pursuant to paragraph 6 of the Agreement.

Pursuant to the Lease instrument, plaintiff leased from Niagara Vest for a period of one year "Building 23 & 1B" of the former Union Carbide Republic Plant.

Defendants dispute plaintiff's status as lessee and argue in support of their motions that plaintiff was evicted from the Site in May 1990 for failure to pay rent and taxes in violation of both the Agreement and the Lease. The circumstances and import of this alleged eviction are more fully discussed within.

Plaintiff's complaint further alleges that Union Carbide owned the Site prior to Niagara Vest, and for over 40 years had occupied the Site and operated a manufacturing facility on it. Plaintiff alleges that during the course of its operations, Union Carbide handled, used, stored and disposed of hazardous substances on the Site and adjacent property, and that following Niagara Vest's acquisition of the Site, Niagara Vest caused or permitted the deposit and storage of hazardous substances on property contiguous to the Site. Due to resulting releases, plaintiff allegedly incurred response costs consistent with the national contingency plan.

Plaintiff alleges eight Claims for Relief, seven against both defendants and one against Niagara Vest alone. Three of the claims common to both defendants arise under federal law. Those claims, (the First, Second and Sixth Claims respectively), seek (1) recovery from defendants, pursuant to § 107(a) of CERCLA, 42 U.S.C. § 9607(a), of all past, present and future response costs; (2) contribution from defendants, pursuant to § 113(f) of CERCLA, 42 U.S.C. § 9613(f), for all necessary response costs incurred by plaintiff; and (3) a declaratory judgment, pursuant to 28 U.S.C. § 2201(a), setting forth "the rights and obligations of the parties with the [sic] regard to the hazardous substance contamination," (Complaint, ¶ 47), and the liabilities of defendants with regard to response costs incurred and to be incurred by plaintiff.

The four remaining counts common to both defendants allege state law claims for: (4) negligence (Third Claim); (5) strict liability (Fourth Claim); (6) common law restitution (Fifth Claim); and (7) "equitable indemnity" (Seventh Claim).

Plaintiff's Eighth Claim, asserted against Niagara Vest alone, alleges fraud in violation of state law.

Neither defendant has answered the complaint, but rather, both have moved for dismissal pursuant to Fed.R.Civ.P. 12(b).

DISCUSSION

I. Federal Claims

a.  First Claim

Plaintiff alleges that both defendants are liable under CERCLA because they owned or operated the Site at the time hazardous substances were released, and "[a]s a direct and proximate result of the releases," plaintiff "has incurred and will continue to incur costs for testing, investigation, and remediation of the releases into the soil, subsoil, surface water, and ground water . . ." (Complaint, ¶¶ 23 & 25).

Defendants allege that this fails to state a CERCLA claim because plaintiff "fails completely to allege . . . the costs it incurred, or the actions it took in response to the allegedly hazardous conditions at the Site." Defendants also argue that plaintiff should be required to plead the dates on which it incurred the alleged costs. (Union Carbide's Memo at 26-27).

Plaintiff must allege as an element of its prima facie case under § 107 of CERCLA that it incurred response costs. However, plaintiff "need not particularize the costs" that it incurred. State of New York v. General Electric Co., 592 F. Supp. 291, 298 (N.D.N.Y. 1984). In General Electric, 592 F. Supp. at 298, an allegation that plaintiff "has incurred and will continue to incur expenses and costs . . ." sufficiently alleged recoverable response costs. See also Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1156 (9th Cir. 1989) (an allegation in the complaint that plaintiff had "been forced to incur response costs and in fact spent substantial amounts toward the clean-up, removal and remedial action" at a particular site sufficiently alleged response costs). But see McGregor v. Industrial Excess Landfill, Inc., 856 F.2d 39 (6th Cir. 1988) (plaintiff's complaint was insufficient because it did not allege either the costs incurred, or the action taken in response to the hazardous condition).

A pleading should only be dismissed for failure to state a claim if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). I find that plaintiff has alleged that it incurred response costs with sufficient specificity to survive defendants' motion to dismiss. However, it is to be noted that in light of my holding, infra, regarding plaintiff's Sixth Claim for Relief for a declaratory judgment, I find that in order to survive defendants' motion to dismiss, plaintiff must amend its complaint to allege the dates on which it incurred response costs. Therefore, defendants, motion to dismiss plaintiff's First Claim for Relief is denied but plaintiff is directed to amend its First Claim for Relief to allege the dates on which it incurred response costs.

b.  Second Claim

Plaintiff seeks contribution from defendants pursuant to § 113(f)(1) of CERCLA, 42 U.S.C. § ...


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