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Nature Conservancy v. Wilder Corp. of Delaware

May 28, 2009

THE NATURE CONSERVANCY, PLAINTIFF,
v.
WILDER CORPORATION OF DELAWARE, DEFENDANT.



The opinion of the court was delivered by: Michael M. Mihm United States District Judge

ORDER

This matter is before the Court on Plaintiff's Second Motion for Partial Summary Judgment. For the reasons set forth below, Plaintiff's Second Motion for Partial Summary Judgment [#55] is GRANTED IN PART and DENIED IN PART.

BACKGROUND

Plaintiff, The Nature Conservancy (the "Conservancy"), entered into an agreement dated February 22, 2000, with Defendant, Wilder Corporation of Delaware ("Wilder") (hereinafter referred to as the "Purchase Agreement"). Pursuant to the Purchase Agreement, Wilder agreed to sell the Conservancy 6,660 acres of land, together with buildings and improvements, in Fulton County, Illinois, for $16,350,000.00. The Conservancy purchased this property for use as a nature preserve. The Purchase Agreement was subsequently amended by an Amendment to Purchase Agreement dated March 7-8, 2000 (the "Amendment"). As provided in the Purchase Agreement, upon closing the Conservancy leased the property back to Wilder via a lease dated April 21, 2000 (the "Lease").

Pursuant to the terms of the Purchase Agreement, Wilder was required to remove all rubbish, trash, and hazardous or toxic chemical substances or materials, including petroleum, on the Property prior to closing. Wilder wanted to close the sale of the property on or before May 1, 2000, prior to meeting all of its obligations under the Purchase Agreement. The Conservancy agreed to close the purchase prior to Wilder's cleaning up any rubbish, trash, and hazardous or toxic chemical substances or materials on the property in consideration for the agreements made by Wilder as memorialized in a supplemental agreement dated April 24-25, 2000 (the "Supplemental Agreement").

Under the Supplemental Agreement, the Conservancy withheld $75,000.00 from the purchase price contingent upon Wilder completing its obligations by August 1, 2000. If Wilder did not complete its obligations by that time, the Conservancy was entitled to complete those obligations and deduct the cost from the $75,000.00 withheld. With the exception of the payment of the $75,000.00, Wilder agrees that the Conservancy has performed all conditions to be performed by it under the Purchase Agreement, the Amendment, the Lease, and the Supplemental Agreement.

Wilder and others conducted a cattle operation on the property involving 5,000 -6,000 head of cattle. Sewage lagoons were maintained on the property to handle the waste generated by the cattle. These lagoons were lagoons as defined in Section 10.25 of the Livestock Management Facilities Act, 510 ILCS 77/10.25 and the Livestock Management Facility Regulations promulgated by the Illinois Department of Agriculture as 8 Ill. Admin. Code § 900.103, and Wilder neither sought nor obtained a waiver of the requirements under 510 ILCS 77/15(e) or 8 Ill. Admin. Code § 900.608(a).

Pursuant to the Supplemental Agreement, Wilder specifically agreed to dispose of all liquids and solids in and around the sewage lagoons on the property in compliance with all legal requirements. In June and August 2001, Wilder obtained several bids to clean out the material in the sewage lagoons ranging from $230,200.00 to $450,000.00. Wilder admits that it did not dispose of the solids in and around the sewage lagoons on the property, but argues that it did dispose of the liquids. However, Wilder admits that the net cost to the Conservancy for the disposal of the liquids and solids in and around the sewage lagoons on the property was $274,888.82.

The Lease required Wilder to pay the real estate taxes due for the period from the execution of the Lease through December 31, 2002. It is undisputed that Wilder owes the Conservancy $49,229.98 for these real estate taxes.

In the Purchase Agreement, Wilder agreed to "indemnify, defend and hold the Conservancy harmless from any loss or liability" relating to the representations and warranties contained therein. One of the representations and warranties was that "[n]o hazardous or toxic substance, material or waste, including without limitation asbestos, petroleum, or material containing or producing polychlorinated biphenyls (PCBs), is presently stored or located on the Property at levels greater than natural background concentrations." Wilder also represented and warranted that:

There have not been and there are not now any underground or above ground storage tanks, septic tanks or wells located on or under the property or if there have been or are any such tanks or wells located on the property, their location has been identified to the Conservancy in writing, they have been properly registered with all appropriate authorities, they are in full compliance with all applicable statutes, ordinances and regulations, and they have not resulted in the release of any hazardous or toxic substance, material or waste into the environment.

Wilder did not identify in writing the existence and location of any underground storage tanks on the property and, in fact, affirmatively represented to the Conservancy that there were no such tanks.

In the Supplemental Agreement, Wilder agreed that at the end of the Lease term, it would clean up and properly dispose of any soil contaminated with diesel fuel, motor oil, herbicides/pesticides, or other agricultural chemicals, and any hazardous or toxic chemical substances or materials. Wilder also specifically agreed to remove all soil contaminated with diesel fuel that had leaked or spilled around two underground storage tanks identified as tanks 3 and 4 and inside a building identified as the Pump House. Wilder agreed that after it removed this contaminated soil from these areas, it would test the remaining soil to confirm that all contaminated soil had been removed. The parties dispute whether Wilder removed the contaminated soil from around tanks 3 and 4, but agree that it did not remove the contaminated soil from in the Pump House or conduct any post-removal testing.

The Conservancy brought this action against Wilder for breach of contract. On December 28, 2007, the Court granted in part and denied in part the Conservancy's prior Motion for Partial Summary Judgment. The Motion was granted with respect to the Conservancy's claims that: (1) Wilder was liable for unpaid real estate taxes; (2) Wilder was liable for breach of express warranties that there were no underground storage tanks; and (3) Wilder was liable for breach of contract with respect to petroleum contamination around storage tanks 3 and 4. The Court rejected the Conservancy's contract argument and found genuine issues of material fact with respect to whether sewage lagoons were removed from service, thereby triggering the requirements of 8 Ill. Admin. Code § 900.103.

The Court subsequently reopened discovery, allowed the Conservancy to amend its complaint to seek relief for additional areas of alleged contamination, and granted Defendant's request to file counterclaims for certain set offs. The Amended Complaint added allegations that Wilder had failed to clean up contaminated soils around the former site of an aboveground storage tank ("AST") south of the Pump House and that this contamination also constituted a breach of Wilder's warranty that no petroleum was located on the property in greater than natural background concentrations. The Conservancy has now filed its Second Motion for Partial Summary Judgment. The matter is fully briefed, and this Order follows.

DISCUSSION

Summary judgment should be granted where "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the responsibility of informing the Court of portions of the record or affidavits that demonstrate the absence of a triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party may meet its burden of showing an absence of disputed material facts by demonstrating "that there is an absence of evidence to support the non-moving party's case." Id. at 325. Any doubt as to the existence of a genuine issue for trial is resolved against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Cain v. Lane, 857 F.2d 1139, 1142 (7th Cir. 1988).

If the moving party meets its burden, the non-moving party then has the burden of presenting specific facts to show that there is a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Federal Rule of Civil Procedure 56(e) requires the non-moving party to go beyond the pleadings and produce evidence of a genuine issue for trial. Celotex, 477 U.S. at 324. Nevertheless, this Court must "view the record and all inferences drawn from it in the light most favorable to the [non-moving party]." Holland v. Jefferson Nat. Life Ins. Co., 883 F.2d 1307, 1312 (7th Cir. 1989). Summary judgment will be denied where a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Hedberg v. Indiana Bell Tel. Co., 47 F.3d 928, 931 (7th Cir. 1995).

There is no dispute that the various contracts and agreements at issue in this case are valid and enforceable. The Conservancy has brought this Motion alleging that Wilder did not complete its obligations under the agreements in three respects: (1) liability and damages for the cost of cleaning out the sewage lagoons; (2) damages for remediating petroleum contamination associated with underground storage tanks; (3) liability and damages for remediating petroleum contamination associated with the AST south of the Pump House; and ...


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