COA affirms plaintiff can’t succeed on environmental action claims

August 4, 2016

The Indiana Court of Appeals affirmed Thursday that based on the statute of limitations the owners of contaminated land can’t assert environmental claims against previous owners of the land who contributed to the contamination.

Schuchman/Samberg Investments purchased a piece of land in Indianapolis in 1998 that has historically been used for bulk storage of oil and other petroleum products in underground storage tanks and aboveground storage tanks. After buying the land, SSI received a copy of a 1998 phase I environmental report, which noted the previous use of the property for bulk oil storage and that an environmental assessment was performed in 1995. Barry Schuchman, an SSI principal, testified he believed he was “stuck” with a potentially contaminated property.

In 2006, the Indiana Department of Environmental Management sent SSI a letter asking it to look into the contamination on the site. In 2011, IDEM approved SSI’s remediation work plan, which it is currently in the process of conducting.

In November 2009, SSI sued Hoosier Penn and other previous operators on the site seeking reimbursement costs for the remediation. SSI asserted claims under the Environmental Legal Actions Statute, the Indiana Underground Storage Tank Act and the Petroleum Releases Act. The former operators filed a joint motion for partial summary judgment regarding the ELA and PRS claims, which the trial court granted.

The trial court concluded the ELA claim was untimely and that the PRS does not provide SSI with a right to recover based on the circumstances of this case. In Schuchman/Samberg Investments, Inc. v. Hoosier Penn Oil Co. Inc., et al., 49A02-1508-MI-1051, the COA agreed.

The ELA does not include an express statute of limitation. This required the COA to look at other cases dealing with this issue and determine that SSI’s claim is for damage to real property, which is subject to the six-year statute of limitations set forth in I.C. 34-11-2-7, not the 10-year statute of limitations as SSI argued applies because the claim involves contribution.  

“SSI is seeking recovery of costs incurred to remediate its own property. No amount of careful wording or clever analysis can transform what is so plainly a claim for damage to real property into one for contribution,” Judge Robert Altice wrote.

And because the undisputed facts establish that SSI had actual knowledge sufficient to trigger the limitations period in July 1998, the company’s ELA claim was filed outside the limitations period.  

The trial court also concluded that because it was SSI that undertook remediation at IDEM’s direction, as opposed to IDEM carrying out the remediation itself pursuant to I.C. 13-24-1-2 and seeking to recover costs from SSI, the PRS did not permit SSI to recover costs from third parties. The COA affirmed the trial court.

“The ELA allows an owner of property contaminated by a petroleum facility release to bring an action to recover remediation costs from another person that caused or contributed to the release,” Altice wrote. “We are not at liberty to construe the PRS more broadly than its language allows so as to relieve SSI of the consequences of its failure to file its ELA claim within the applicable limitation period.”


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