Greyhound Lines Incorporated v. Viad Corporation, 2:15-cv-01820

Background

In 1987 GLI bought numerous properties from Viad, including 1250 Denny Way (Seattle), which contained 11 underground storage tanks (USTs). The Acquisition Agreement sold assets "as is."
The Third Amendment (Mar. 18, 1987) limited Viad’s environmental liability to remediation of leaks from USTs and established a step-down allocation (100% first year, decreasing 20% per year to zero after five years).
Later agreements (Claims Treatment Agreement and Settlement Agreement) shifted primary environmental responsibility to GLI except for Environmental Obligations of which Viad was "Notified" before March 1, 1992. "Notified" requires reasonable written disclosure (or regulator notice or Viad involvement).
GLI notified Viad in June 1989 of hydrocarbon contamination and in March 1990 of a vapor leak in two tanks; Viad accepted a 60% allocation for the 1990 vapor leak. A more serious diesel tank failure and free product were discovered in early 1992 (after some pre-1992 activity), and other contaminants (gasoline, lube oil, hydraulic oil, waste oil, chlorinated solvents) were discovered later (mostly post-1992).
GLI sued Viad (2015) seeking contractual and statutory recovery (60% of a $5.95M sale-price reduction and other costs). Viad counterclaimed for $547,177 paid to GLI for post-January 1992 remediation costs. The bench trial resulted in findings for Viad on GLI’s claims and for GLI on Viad’s counterclaim.

Issues

Issue	Plaintiff's Argument (GLI)	Defendant's Argument (Viad)	Held
Scope of Third Amendment liability	Third Amendment notice (June 12, 1989) made Viad liable for GLI’s 60% share of all remediation at a property where notice was given	Liability is limited to remediation tied to confirmed UST leaks at a tank-specific location and triggered only upon reasonable written notice, confirmation of a leak, and commencement of remediation	Held: Viad’s liability limited to contamination tied to UST leaks; GLI’s broad-property theory rejected
Whether GLI’s 1989 notice triggered Viad’s 60% liability for all later-discovered contamination	1989 letter disclosed hydrocarbon contamination and thus locked in 60% allocation for Seattle Property	1989 letter related only to possible leaks; additional steps (leak confirmation and remediation commencement) required for each leak and for each contaminant	Held: 1989 letter did not trigger liability for contaminants not tied to a confirmed UST leak or not noticed/ remediated before Mar. 1, 1992
Statutory claims under CERCLA and Washington MTCA	GLI seeks full recovery under CERCLA/MTCA for sale price reduction and solvent costs	Contracts allocate environmental obligations to GLI post-cutoff; private contracting of CERCLA/MTCA liability is enforceable	Held: Contract controls; GLI’s CERCLA and MTCA claims barred by the parties’ agreements (and in any event GLI failed to prove statutory elements and causal link to Viad’s operations)
Viad’s counterclaim for overpayments (statute of limitations)	Viad argues it only discovered improper billing after GLI sued and that GLI concealed facts	GLI contends Viad received sufficient invoices/communications and had opportunity/ability to investigate earlier	Held: Viad had notice by 1992 (GLI disclosed free product diesel and substantial remediation plans and Viad agreed to pay); discovery rule triggered then; counterclaim barred by the six-year statute of limitations and Viad failed to segregate timely damages

Key Cases Cited

Taylor v. State Farm Mut. Auto. Ins. Co., 854 P.2d 1134 (Ariz. 1993) (court enforces contract according to parties’ intent; parol evidence admissible if contract reasonably susceptible)
Associated Students of the Univ. of Ariz. v. Arizona Bd. of Regents, 584 P.2d 564 (Ariz. Ct. App. 1978) (parties’ pre-dispute conduct is strong evidence of contract meaning)
United Dairymen of Arizona v. Schugg, 128 P.3d 756 (Ariz. Ct. App. 2006) (elements for breach of implied covenant of good faith and fair dealing)
Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Am., 898 P.2d 964 (Ariz. 1995) (discovery rule for accrual of claims; plaintiff’s knowledge or reason to know)
Walk v. Ring, 44 P.3d 990 (Ariz. 2002) (standard for when reasonable person is on notice to investigate under discovery rule)
Jones-Hamilton Co. v. Beazer Materials & Servs., Inc., 973 F.2d 688 (9th Cir. 1992) (private indemnity agreements allocating CERCLA liability are enforceable)
Car Wash Enterprises, Inc. v. Kampanos, 874 P.2d 868 (Wash. 1994) (MTCA does not prohibit private allocation of cleanup liability)