The opinion of the court was delivered by: Arcara, District Judge
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
REPORT and RECOMMENDATION
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).
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
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.
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