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LCCS Group v. Lenz Oil Service Peoria, Inc.

United States District Court, N.D. Illinois, Eastern Division

April 26, 2018

LCCS GROUP, Plaintiff,
v.
LENZ OIL SERVICE PEORIA, INC., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          AMY J. ST. EVE, UNITED STATES DISTRICT COURT.

         On June 3, 2016, Plaintiff LCCS Group brought a Complaint against numerous Defendants, including Defendant Lenz Oil Service Peoria, Inc. (“Lenz Oil Peoria”), pursuant to certain provisions of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq. (“CERCLA”). In particular, Plaintiff alleges that there has been a release and/or threat of release of hazardous substances from a facility known as the Lake Calumet Cluster Site (“LCCS Site”) located in Chicago, Illinois, and that these hazardous substances have contaminated the soil and groundwater threatening the public health and environment.

         Before the Court is Defendant Lenz Oil Peoria's motion for summary judgment brought pursuant to Federal Rule of Civil Procedure 56(a). In its motion, Lenz Oil Peoria argues that it is a separate corporate entity from Lenz Oil Service Company, which is identified in the LCCS Site Records. Plaintiff, on the other hand, asserts that Lenz Oil Peoria is the legal successor to Lenz Oil Service Company. Because Plaintiff has presented sufficient evidence raising a triable issue of fact that Lenz Oil Peoria is the legal successor to Lenz Oil Service Company, the Court denies Defendant's motion for summary judgment.

         BACKGROUND

         I. Northern District of Illinois Local Rule 56.1

         Defendant Lenz Oil Peoria did not follow the Northern District of Illinois Local Rules when setting forth its own Rule 56.1 Statement of Facts and failed to respond to Plaintiff's Local Rule Statement of Additional Facts pursuant to the local rules. See Thornton v. M7 Aerospace LP, 796 F.3d 757, 769 (7th Cir. 2015) (“This court has repeatedly held that the district court is within its discretion to strictly enforce compliance with its local rules regarding summary-judgment motions”). Because Lenz Peoria did not respond to Plaintiff's Statement of Additional Facts pursuant to Local Rule 56.1, Plaintiff's statements are deemed admitted for purposes of this summary judgment motion. See Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009) (“When a responding party's statement fails to dispute the facts set forth in the moving party's statement in the manner dictated by the rule, those facts are deemed admitted for purposes of the motion.”); N.D.Ill. L.R. 56.1(b)(3)(C) (“All material facts set forth in the statement required of the moving party will be deemed to be admitted unless controverted by the statement of the opposing party.”).

         II. Relevant Facts

         In 1947, Frederick John Lenz, Sr. founded Lenz Oil Service, Inc., and Lenz Oil Service was incorporated on November 17, 1961. (R. 315-1, Pl.'s Rule 56.1 Stmt. Add'l Facts ¶ 1.) Until May 1979, Winston E. Lenz (“Winston”) and Frederick John Lenz, Jr. (“John”) (collectively, the “Lenz Brothers”) were the principals of Lenz Oil Service. (Id. ¶ 3.) Also, until May 1979, the Lenz Brothers jointly operated Lenz Oil Service for oil and solvent storage and treatment, as well as road surfacing, with locations in both Lemont and Peoria, Illinois. (Id. ¶ 4.) As of May 1, 1979, Winston owned 55% of Lenz Oil Service shares and John owned 45%. (Id. ¶ 5.) On May 1, 1979, various interested parties entered into an agreement under which Winston would continue the road resurfacing business in Lemont and John would continue the oil storage business in Peoria as a new company. (Id. ¶ 6.) Part of this corporate restructuring agreement involved third-party, Charles William Russell, who bought out John's shares of Lenz Oil Service in late May 1979. (Id. ¶ 8.) On May 8, 1979, Lenz Oil Peoria was incorporated as an Illinois corporation. (Id. ¶ 11; R. 303, Def.'s Rule 56.1 Stmt. Facts ¶ 11.) Pursuant to the Agreement for Corporate Separation, John eventually became the 100% shareholder of Lenz Oil Peoria. (Id. ¶ 9.)

         Lenz Oil Peoria was incorporated with a purpose to “[c]ollect, purchase, acquire, process and sell waste oil and related materials; sell, use, store and apply waste oil, its by products, and related materials, surface roads with asphalt, waste oil chips and related materials, and related operations; and to do any and all things incident thereto including, but not limited to, the acquisition and holding of real estate.” (Pl.'s Stmt. Add'l Facts ¶ 12) (citing Preorganization Subscription Agreement & Lenz Oil Peoria Articles of Incorporation). As sole director of Lenz Oil Peoria, John appointed his son, Michael Lenz, to various positions within Lenz Oil Peoria. (Id. ¶ 13.) Before Plaintiff filed this lawsuit, Mike Lenz, as Secretary of Lenz Oil Peoria, wrote a letter to Plaintiff's counsel dated November 24, 2015, that states:

Lenz Oil Service Peoria, Inc. is based out of Peoria, IL. We have never done any business with Chemical Incineration. We have never been in the solvent disposal business. Lenz Oil Service Peoria, Inc. has never been affiliated with the Lenz Oil company from Lemont, IL listed on the invoices.

(Def.'s Stmt. Facts ¶ 12; R. 303-1, LENZ 00010, 11/24/15 letter.)

         LCCS Site Records show that “Lenz Oil Service” in Lemont, Illinois disposed of approximately 133, 200 gallons of waste described as “solvents” starting on March 22, 1979 - before Lenz Oil Peoria had been formed - through July 13, 1979 - approximately six weeks after the incorporation of Lenz Oil Peoria. (Id. ¶ 15.) Lenz Oil Services filed for Chapter 7 bankruptcy on April 4, 1986. (Id. ¶ 21.)

         SUMMARY JUDGMENT STANDARD

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). In determining summary judgment motions, “facts must be viewed in the light most favorable to the nonmoving party only if there is a ‘genuine' dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d ...


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