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MAINLINE CONTRACTING CORP. v. CHOPRA-LEE

June 8, 2000

MAINLINE CONTRACTING CORP., PLAINTIFF
V.
CHOPRA-LEE, INC. AND CAMP DRESSER & MCKEE, INC., DEFENDANTS. CHOPRA-LEE, INC., THIRD-PARTY PLAINTIFF V. ENVIRONMENTAL CONTROLS CORP., THIRD-PARTY DEFENDANT.



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

  ORDER

This case was referred to Magistrate Judge Leslie G. Foschio pursuant to 28 U.S.C. § 636(b)(1), on May 19, 1999. Motions for summary judgment were filed by defendant Camp Dresser & McKee, Inc. on August 24, 1999, and by defendant Chopra-Lee, Inc. on August 26, 1999. On March 22, 2000, Magistrate Judge Foschio filed a Report and Recommendation, recommending that the defendants' summary judgment motions be denied.

On March 31, 2000, defendant Camp Dresser & McKee, Inc. filed objections to the Report and Recommendation, and on April 13, 2000 plaintiff filed a response thereto. Oral argument on the objections was held on May 18, 2000.

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions from the parties, the Court adopts the proposed findings of the Report and Recommendation.

Accordingly, for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation, defendants' motions for summary judgment are denied and the case referred back to Magistrate Judge Foschio for settlement discussions. If the case is not settled, the parties shall appear before this Court on September 18, 2000 at 9:00 a.m. for a status conference.

IT IS SO ORDERED.

REPORT and RECOMMENDATION

JURISDICTION

This case was referred to the undersigned on May 19, 1999, by Honorable Richard J. Arcara for report and recommendation on all dispositive motions. The matter is presently before the court on motions for summary judgment filed by Defendants Camp Dresser & McKee, Inc., on August 24, 1999 (Docket Item No. 20), and Chopra-Lee, Inc. on August 26, 1999 (Docket Item No. 23).

BACKGROUND

Plaintiff Mainline Contracting Corp. ("Mainline"), commenced this action on June 4, 1998, alleging causes of action under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601, et seq., and New York common law, incurred in connection with the disposal of transformer oil contaminated with polychlorinated biphenyls ("PCBs"). Specifically, the CERCLA causes of action include indemnification under 42 U.S.C. § 9607, contribution under 42 U.S.C. § 9607-13, and a declaration of rights under CERCLA. Complaint, Counts I, II and VIII. Mainline also seeks relief under New York common law grounds for negligence, strict liability, negligence per se, indemnification and common law contribution. Complaint, Counts III, IV, V, VI and VII, respectively.

Defendant Chopra-Lee, Inc. ("Chopra-Lee"), filed an answer to the Complaint on July 7, 1998. On July 16, 1998, Chopra-Lee commenced a third-party action against Environmental Controls Corp. ("ECC"), from whom Chopra-Lee sought contribution should Mainline be ultimately found entitled to damages from Chopra-Lee. ECC's answer to the third-party complaint, filed September 4, 1998, asserts three counterclaims against Chopra-Lee, including to hold Chopra-Lee jointly and severally liable to ECC under 42 U.S.C. § 9607, contribution under 42 U.S.C. § 9607(a), and strict liability.

Camp Dresser & McKee, Inc. ("CDM"), filed an answer to the Complaint on September 28, 1998. Included in CDM's answer is a cross-claim against Chopra-Lee asserting that Chopra-Lee is required to indemnify CDM for any judgment entered against CDM, including attorney fees, costs and expenses, and to provide a defense for CDM.

On August 24, 1999, CDM filed the instant motion for summary judgment, accompanied by the Declaration of Hugh M. Russ, III, Esq. (Docket Item No. 20) ("Russ Declaration"), a Statement of Material Facts (Docket Item No. 21), and a Memorandum of Law (Docket Item No. 22) ("CDM Memorandum"). In opposition to CDM's motion, Mainline filed, on November 16, 1999, the Affidavit of Craig A. Slater, Esq. (Docket Item No. 37) ("Slater Affidavit I"), and a Memorandum of Law (Docket Item No. 38) ("Mainline Memorandum in Opposition to CDM's Motion"). In further support of its motion, CDM filed, on December 7, 1999, a Reply Memorandum of Law (Docket Item No. 40) ("CDM Reply"), and a Reply Declaration by Hugh M. Russ, III, Esq. (Docket Item No. 41) ("Russ Reply Declaration").

On August 26, 1999, Chopra-Lee also filed a motion for summary judgment, accompanied by the Affidavit of John J. Giardino, Esq. (Docket Item No. 23) ("Giardino Affidavit"), a Statement of Uncontested Facts (Docket Item No. 24), and a Memorandum of Law in support (Docket Item No. 25) ("Chopra-Lee Memorandum"). In opposition to Chopra-Lee's motion, Mainline filed, on October 5, 1999, an affidavit with exhibits by Craig A. Slater, Esq. (Docket Item No. 30) ("Slater Affidavit II"), an affidavit by Richard Ziegler (Docket Item No. 32) ("Ziegler Affidavit"), an affidavit by Norman N. Neuner (Docket Item No. 34) ("Neuner Affidavit"), a Memorandum of Law (Docket Item No. 31) (Mainline Memorandum in Opposition to Chopra-Lee's Motion), and a Response to Chopra-Lee's Statement of Uncontested Facts. (Docket Item No. 33).

Limited informal oral argument was conducted by telephone conference call on March 15, 2000. Following oral argument, the parties were permitted to file further submissions with the court. Accordingly, letters in further support of the summary judgment motions were submitted to the court by Chopra-Lee on March 17, 2000 (Docket Item No. 43), and by CDM on March 20, 2000 (Docket Item No. 44).

Based on the following, Camp Dresser & McKee, Inc.'s, and Chopra-Lee, Inc.'s motions should be DENIED.

FACTS*fn1

The claims in this action arise from the demolition and cleanup of the former Louisville Forge & Gear Works Inc. site ("the LF & G site" or "the site"), located in Louisville, Kentucky. Originally farmland, the LF & G site has been used for heavy industrial manufacturing since the 1940s including aircraft manufacturing, tractor manufacturing and forging engine parts. In 1993, the Louisville Regional Airport Authority ("the RAA"), acquired the LF & G site with intention of expanding the Standiford Airport ("the airport") located on land adjacent to the site.

In preparation for the airport expansion, on March 29, 1990, a Subcontract Agreement was executed between Howard, Needles, Tamme & Bergendoff ("HNTB"), as consultant to the RAA, and CDM, as subconsultant ("the 1990 Subcontract Agreement"). Services to be rendered by CDM to the RAA and HNTB under the 1990 Subcontract Agreement included assisting in final design activities for the expansion of the airport. These activities included environmental work which CDM, as sub-consultant, was authorized to subcontract with other subconsultants to perform at the LF & G site. The 1990 Subcontract Agreement also provided that CDM was to indemnify the RAA and HNTB for any claims, losses, expenses or damages to property, unless such liability arose out of the RAA's negligence.

The RAA solicited bid proposals for the demolition and removal of all above-ground structures and improvements at the LF & G site. In connection with the bidding process, on October 25, 1996, the RAA issued the Contract Document for Demolition Services for LF & G — Phase II ("the Contract Document"), by which CDM was designated as the demolition Program Manager at the LF & G site, and vested with the authority necessary to ensure proper demolition, including stopping work on the project and rejecting any non-conforming work or material. The Contract Document defines the contractor as "[t]he individual, partnership, firm or corporation to which the Award [of the bid] is made and which is primarily liable for the acceptable performance of the Work in conformance with the Contract Documents." Contract Document, p. GC-3, Russ Declaration Exhibit N. The RAA awarded the contract for the demolition project to Mainline which became the contractor under the Contract Document. The Contract Document also contains an indemnification agreement that provides

The Contractor [Mainline], and all Subcontractors, agree to indemnify and hold the Authority [the RAA], Camp, Dresser & McKee, the Program Manager and their respective officers, agents and employees, free and harmless from and against any and all claims, suits, loss or damage, or injury to persons or property that might occur during the construction of the Project, unless such acts result from the sole negligence of the Authority, Camp, Dresser & McKee, the Program Manager and their respective officers, agents or employees.

Contract Document, p. SC-1, ¶ 1 and p. SCC-1 (Addendum Number 1), Exhibit N to Russ Declaration, and Exhibit C to Slater Affidavits I and II (emphasis added).

On December 18, 1996, CDM submitted a proposal to HNTB to provide services related to the LF & G site demolition project. On January 9, 1997, Mainline and the RAA executed the actual contract for the demolition work to be performed at the site ("the Demolition Contract"). Exhibit C to Russ Reply Declaration. The Demolition Contract incorporated by ...


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