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UNITED STATES v. PETERSEN SAND & GRAVEL

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION


November 5, 1992

UNITED STATES OF AMERICA, Plaintiff,
v.
PETERSEN SAND AND GRAVEL, INC., Defendant. PETERSEN SAND AND GRAVEL, INC., Defendant/Third Party Plaintiff v. LAKE COUNTY FOREST PRESERVE DISTRICT, et al., Third Party Defendants.

Conlon

The opinion of the court was delivered by: SUZANNE B. CONLON

Judge Suzanne B. Conlon

MEMORANDUM OPINION AND ORDER

 Lake County Forest Preserve District ("the Forest Preserve") moves for reconsideration of this court's order denying summary judgment. Petersen Sand and Gravel, Inc. ("Petersen, Inc.") opposes the motion.

 Motion for Reconsideration

 In an amended memorandum opinion and order occasioned by the Forest Preserve's first motion for reconsideration, the court held that there was a genuine issue of material fact as to whether a CERCLA disposal had occurred on the Petersen, Inc. site after the Forest Preserve acquired the land in 1982. See United States v. Petersen Sand & Gravel, Inc., F. Supp. 1992 W.L. 293328, at *27-28 (N.D. Ill. Oct. 7, 1992). *fn1" In reaching that conclusion, the court relied on Exhibit 6 to Petersen, Inc.'s consolidated memorandum in opposition to summary judgment. Exhibit 6 was an Illinois Environmental Protection Agency ("IEPA") complaint investigation form. The handwriting on the form indicated that an agent of the Forest Preserve reported to the IEPA that four drums containing unknown chemicals were disposed of on Forest Preserve property sometime in 1985. The form describes the location where the drums were dumped in relation to Lake County landmarks; the form does not indicate whether the disposal site was the Petersen, Inc. property.

 While the form did not indicate that it referred to the site at issue, Petersen, Inc. did. Petersen, Inc. thrice represented to this court that the form referred to a disposal on the Petersen, Inc. site. See Petersen, Inc. Opp. at 33, 34, 36. The court relied on those representations and denied summary judgment.

 It is now undisputed that Petersen, Inc.'s representations were entirely false. The IEPA form referred to disposal on Forest Preserve property, but that property is located eleven miles distant from the Petersen, Inc. site. Mot. Ex. A., Laurie Aff. PP 12, 13. *fn2" Thus the court's opinion was predicated on an error of fact.

 The Forest Preserve moves for reconsideration on the ground that the error was significant and controlling. The Forest Preserve argues that this motion is its first opportunity to address the error. The Forest Preserve points out that it was not authorized to file a reply to Petersen, Inc.'s opposition containing the misrepresentation. *fn3" The Forest Preserve's first motion for reconsideration could not address the error because the court's initial opinion did not rely on the misrepresented IEPA form. A court may grant a motion for reconsideration to correct a clear error of fact. Rothwell Cotton Co. v. Rosenthal & Co., 827 F.2d 246, 251 (7th Cir. 1987).

 Petersen, Inc. opposes the motion on the grounds that (1) a motion to reconsider can only modify a judgment, not a denial of summary judgment; and (2) the Forest Preserve is not entitled to reconsideration because it did not exercise due diligence in uncovering Petersen, Inc.'s plan to use the IEPA form. These objections are frivolous. As to the first ground, it is absolutely undisputable that a court may, sua sponte or on motion, correct clear errors of fact or law in an interlocutory order. Marconi Wireless Co. v. United States, 320 U.S. 1, 47-48 (1942) (courts have inherent power to modify interlocutory orders); Fed. R. Civ. P. 54(b) (any form of interlocutory decision or order may be modified until final judgment is entered). *fn4" As to the second ground, Petersen, Inc. has made a significant, material misrepresentation of fact regarding the IEPA form. To be sure, the Forest Preserve might have discovered that Petersen, Inc. had possession of the IEPA form before filing its summary judgment motion. On the otherhand, it is ludicrous to suggest that the Forest Preserve should be penalized for failing to divine that Petersen, Inc. intended to misuse or misrepresent the IEPA form before the Forest Preserve moved for summary judgment. The motion for reconsideration is granted.

 Merits of Original Summary Judgment Motion

 Turning to the merits of the original summary judgment motion, *fn5" the Forest Preserve seeks judgment on the ground that it is an "innocent owner" under CERCLA. Because the Forest Preserve is a government entity that acquired title to the site through eminent domain, it needs to show four requirements to escape liability as an innocent owner: (1) the release was caused solely by an act or omission of a third party who was not an employee or agent of the Forest Preserve; (2) the Forest Preserve exercised due care with respect to the hazardous substance concerned; (3) the Forest Preserve took precautions against foreseeable acts or omissions of any third party; and (4) the disposal or placement of the hazardous substance on, in or at the site occurred before the Forest Preserve acquired the property. 42 U.S.C. ยงยง 9601(35)(A)(ii), 9607(b)(3).

 As to the first requirement, there is not a scintilla of evidence in the record to indicate that the Forest Preserve or any of its agents or employees caused any release. The Forest Preserve demonstrates at length that employees of Raymond A. Petersen were responsible for the barrels on the property. See Forest Preserve 12(m) Ex. 5-6. It is undisputed that fly ash operations ceased before the Forest Preserve acquired the land in 1982. This court has rejected the concept of "passive" disposal urged by Petersen, Inc., see Petersen, 1992 W.L. 293328, at *9, and of course, there were no pesticides disposed of on the property after 1982. The Forest Preserve therefore demonstrates by a preponderance of the evidence that the releases were caused solely by third parties.

 The Forest Preserve has also shown that it exercised due care with respect to the hazardous substances. As soon as it discovered the disposal, the Forest Preserve notified the IEPA and took remedial action. Forest Preserve 12(m) PP 54-62. Petersen, Inc.'s only argument to the contrary involves releases before 1982, but the court has already rejected the notion that the Forest Preserve acquired the property before 1982. See Petersen, 1992 W.L. 293328, at *26. Obviously, the Forest Preserve need not exercise due care as the owner of property before it is the owner of that property. For the same reason, the Forest Preserve has met the fourth requirement -- the Forest Preserve has shown that it took reasonable precautions against acts or omissions by third parties. See H.R. Conf. Rep. No. 962, 99th Cong., 2d Sess. at 86-87 (duty only arises after ownership).

 Finally, the Forest Preserve has shown that the disposal or placement occurred before it acquired the property. The Forest Preserve acquired the site in 1982. See Petersen, 1992 W.L. 293328, at *24-*28. There is nothing in the record even suggesting a disposal after 1982.

 Because the Forest Preserve has met the requirements of CERCLA's innocent owner defense, it is entitled to summary judgment.

 Sanctions

 Resolution of the underlying summary judgment motion does not, however, end the matter. Petersen, Inc. made affirmative misrepresentations to this court in a pleading. Petersen, Inc.'s opposition to summary judgment misrepresented that the IEPA form referred to a disposal on the Petersen, Inc. site. The form referred to no such disposal.

 The court finds that Petersen, Inc.'s opposition papers violated Rule 11. Rule 11 calls for the signer of a pleading to certify that she believes, after making reasonable inquiry, that the pleading is well grounded in fact. Fed. R. Civ. P. 11. The court may, on its own initiative, impose on a signer who violates Rule 11 an appropriate sanction, including attorney's fees. Petersen, Inc.'s opposition was not well grounded in fact -- Exhibit 6 did not refer to the place Petersen, Inc. claimed it did three times in its opposition memorandum. Moreover, even the most fundamental inquiry would have involved an investigation of whether the IEPA form referred to the site at issue. Although the form itself did not speak in terms that only developed during this litigation -- i.e., the form did not refer to the "Petersen, Inc. site" -- the form on its face referred to a different area. Merely looking at a map would have revealed the discrepancy. See Laurie Aff. P 11-12. There was simply no reasonable basis for concluding that the form referred to the Petersen, Inc. site. Therefore Petersen, Inc. could not have formed a good faith belief that its pleading was well grounded in fact after making reasonable inquiry. To make matters worse, when confronted with its misrepresentation by this motion, Petersen, Inc. refused to acknowledge it. Instead of clarifying, it continued to obfuscate. See Recons. Opp. at 2 n.1

 As a direct result of Petersen, Inc.'s violation, the Forest Preserve was required to brief this motion for reconsideration. The court therefore orders counsel for Petersen, Inc. to pay the Forest Preserve its reasonable attorney's fees in preparing its motion and memoranda for reconsideration.

 CONCLUSION

 The motion for reconsideration is granted. Lake County Forest Preserve District's motion for summary judgment is granted. Judgment is entered in favor of third-party defendant Lake County Forest Preserve District and against third-party plaintiff Petersen Sand and Gravel, Inc. Counsel for Petersen Sand and Gravel, Inc. is ordered to pay the Forest Preserve its reasonable attorney's fees in preparing this motion.

 ENTER:

 Suzanne B. Conlon

 United States District Judge

 November 5, 1992


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