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COA clarifies and affirms original opinion in environmental cleanup case

July 17, 2014

The Indiana Court of Appeals granted the request of the city of Indianapolis and the Department of Environmental Management to take another look at its opinion issued in April that allowed businesses that neighbored a contaminated property to intervene in the cleanup case. But the judges affirmed the court’s original decision in all respects.

In the April decision, the appellate court addressed the effect of the simultaneous trial court proceedings and administrative proceedings before the Office of Environmental Adjudications regarding the same issue. IDEM and the city brought civil actions against Ertel Manufacturing, which resulted in an administrative settlement agreement and a settlement approved by the court.

Threaded Rod Co. and Moran Electric Service Inc., which had property located near the contaminated Ertel site, sought to intervene in the trial court action against Ertel. The Court of Appeals allowed the companies to intervene and held the trial court should retain jurisdiction over the entire case until the OEA reaches a final decision on the companies’ pending administrative petitions regarding a no further action letter.  Then, the trial court should make a decision regarding the disbursement to the city of remaining escrow funds.

In Moran Electric Service, Inc., and Threaded Rod Company, Inc. v. Commissioner, Indiana Department of Environmental Management, City of Indianapolis, Ertel Manufacturing Corp., 49A02-1305-MI-432, IDEM and Indianapolis argue that the judges misinterpreted the trial court’s role in this action. They argue the trial court could not order the release of the escrow funds. But the trial court did approve the settlement agreement, and so their argument fails under the doctrine of invited error.

The judges found that IDEM and the city have misplaced reliance on I.C. 13-25-4-23 because the statute does not allow IDEM to perform remedial actions and obtain damages from a party through an administrative order.

Finally, the judges noted it did not matter if they mischaracterized Threaded Rod and Moran as “adjacent property owners,” because the opinion also noted that they were “former or current owners of adjacent properties.” Regardless of the language, they are subject to possible liability for the contaminants on those properties, the judges held.
 

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