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Bruce Coleman and Rochester Auto Maintenance, Inc v. Atlantic Richfield Company

October 24, 2012

BRUCE COLEMAN AND ROCHESTER AUTO MAINTENANCE, INC., PLAINTIFFS,
v.
ATLANTIC RICHFIELD COMPANY, BP OIL CORPORATION, UNITED REFINING COMPANY OF PENNSYLVANIA, AND JOHN DOES DEFENDANTS,



The opinion of the court was delivered by: Hon. Michael A. Telesca United States District Judge

DECISION AND ORDER

INTRODUCTION

Plaintiffs, Bruce Coleman ("Coleman") and Rochester Auto Maintenance, Inc. ("Rochester Auto") (collectively, "Plaintiffs"), bring this action for damages, reimbursement and/or contribution for environmental response costs relating to environmental contamination at 2472 Monroe Avenue, in the Town of Brighton, New York (the "Site"). Plaintiffs allege causes of action under New York Navigation Law and for negligence, public nuisance, implied indemnification and restitution. Defendants United Refining Company ("URC"), Atlantic Richfield Company ("ARCO"), and BP Oil Corporation ("BP")*fn1 (collectively, "Defendants") now move for partial summary judgment arguing that the Plaintiffs can not recover lost profits based on a lost sale of the Site.*fn2 Defendant URC also argues that its liability is limited by a Bill of Sale and Release (the "Release") entered into by Coleman and URC when Coleman purchased the Site from URC in April 1985.

For the reasons set forth below, URC's motion for summary judgment based on the Release is denied. URC, ARCO and BP's motion for summary judgment on the issue of lost profits is granted. Accordingly, Plaintiffs' claim for lost profits is dismissed with prejudice.

BACKGROUND

History of the Site and Sale to Coleman:

ARCO owned the Site from approximately 1936 to 1970 and BP owned the Site from 1970 to 1971, during which time both ARCO and BP operated the Site as a gasoline service station.*fn3 URC owned, operated and supplied gasoline to the site from 1971 until 1985, when it sold the site to Coleman.

Coleman purchased the Site from URC by Warranty Deed and a Release on April 2, 1985. The Release applied to the purchase of "[a]ll personal property of the Seller [URC]", and specifically included and excluded certain pieces of personal property from the definition of personal property contained in the Release. The definition of "all personal property" specifically includes "three 10,000 gallon underground storage tanks". The Release also provides as follows:

It is understood that in the sale of this property, there are no WARRANTIES OF MERCHANTABILITY, there are no warranties which extend beyond the description on the face hereof, and this property is sold as is and with all faults.

It is further understood that the above described equipment was formerly used for the storage and/or handling of gasoline or other petroleum products....

Purchaser as part of the consideration for this sale, hereby fully releases and forever discharges [URC, its] successors and assigns, from any and all actions, causes of action, liability claims and demands whatsoever arising out of the ownership, possession, use or installation of the above described property. Purchaser further agrees to indemnify and hold [URC, its] successors and assigns, harmless from any and all liability for damages and losses of any kind, to person or property, caused in any manner by the ownership, use or installation of the above described property.

URC Exhibit J (Docket No. 53-12)(emphasis added).

Coleman did not intend to use the three underground storage tanks that were included within the definition of the purchased property in the Release. Although he agreed to purchase the three underground storage tanks, he planned to remove the tanks and construct a building on the Site.

Four underground storage tanks were eventually discovered and removed in November 1985 during Coleman's construction of a Jiffy Lube, which opened in 1986. Plaintiff, Rochester Auto, operated the Jiffy Lube at the Site from 1986 through 2004. The tanks appeared to be in good condition when they were removed, but petroleum stained soil was also found and removed with the tanks, as required by the Monroe County ...


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