Court rules on environmental cleanup case

Jennifer Nelson
January 1, 2008
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The Indiana Supreme Court ruled yesterday that the statute of limitations on a claim for contribution toward cleanup costs doesn't begin until the owner is ordered to clean up the property, regardless of whether the owner should have known about the contamination earlier.

The issue in Richard U. Pflanz and Delores J. Pflanz v. Merrill Foster, individually, Merrill Foster d/b/a/ Friendly Foster's Service, and Sunoco Inc. (R&M),  No. 36S01-0710-CV-425, is when the 10-year statute of limitations began on a claim for contribution toward environmental cleanup costs.

Richard and Delores Pflanz bought a former service station from Merrill Foster, who told them there were underground storage tanks of petroleum, but they were not in use and were closed. The Pflanzes opened a tire shop, but later sold the business and leased the property to a third-party.

The Pflanzes discovered in 2001 the tanks remained open and were leaking petroleum and spent more than $100,000 in cleanup costs. They filed a complaint in December 2004 against Foster and Sunoco seeking a determination of liability relating to the environmental contamination, damages under theories of waste, negligence, and stigma, contribution for cleanup costs pursuant to the Underground Storage Tanks Act (USTA), and declaratory relief from future anticipated cleanup costs.

Foster moved to dismiss the claim on the grounds the complaint was barred by the statute of limitations; the trial court dismissed the claim as well as another filed by the Pflanzes on similar grounds.

The Indiana Court of Appeals affirmed, finding the Pflanzes should have tested the property for contamination once Indiana enacted the USTA in 1987 and amended it in 1991, so the statute of limitations began in 1991.

The Indiana Supreme Court decided the statute of limitations on the contribution claim didn't begin to accrue until after the Pflanzes were ordered to clean up the property. Parties who bring contribution claims must wait until the obligation to pay is incurred or otherwise the claim lacks the essential damage element, wrote Chief Justice Randall T. Shepard. As such, when IDEM ordered the Pflanzes to clean up the land in 2001, the claim was within the 10-year statute of limitation.

The statute of limitations of stigma damage claims cannot start until after the claimant has incurred real damage - diminution in property value despite cleanup because future buyers will worry about future cleanup costs. The claim for stigma damages also fell within the statute of limitations, wrote the chief justice.

On the Pflanzes waste and negligence claims, which are governed by a six-year statute of limitations, the Indiana Supreme Court remanded the issue for further examination to determine when the Pflanzes should have known about the environmental issues. The Pflanzes filed these claims, saying they were injured when they purchased the property because Foster fraudulently misrepresented the land; Foster argued the Pflanzes should have investigated the property after the adoption of the USTA legislation.

"We cannot accept the trial court's holding that, as a matter of law, the passage of the USTA automatically put landowners on notice that they should inspect and monitor any underground storage tanks on their property even if, taking the Pflanzes' allegations as true, the former property owners had assured them the tanks were closed and not in use," wrote Chief Justice Shepard.

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  1. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  2. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  3. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.

  4. rensselaer imdiana is doing same thing to children from the judge to attorney and dfs staff they need to be investigated as well

  5. Sex offenders are victims twice, once when they are molested as kids, and again when they repeat the behavior, you never see money spent on helping them do you. That's why this circle continues