Parks Hiway Enterprises, LLC v. CEM Leasing, Inc.Parks Hiway Enterprises, LLC v. CEM Leasing, Inc.
OPINION
I. INTRODUCTION
After Parks Hiway’s groundwater was contaminated by fuel leaking from an adjacent service station, it sued the station’s fuel supplier, Petroleum Sales. The superior court granted summary judgment to Petroleum Sales, finding its relationship to the contamination too remote to impose statutory or common law liability. Parks Hiway now appeals the court’s dismissal of its various claims. Because we agree with the superior court’s findings, we affirm.
II. FACTS AND PROCEEDINGS
Phillip and Genevieve Carboy have owned and operated the Gold Hill Service Station in Fairbanks since 1981. Throughout the Carboys’ ownership, Gold Hill maintained up to three underground storage tanks on its property to hold gasoline. Although the Carboys checked their tanks periodically for leaks, they failed to comply with regulations requiring tank operators to report the tanks’ registration numbers, proof of financial responsibility, and proof of testing to the state.
From 1981 until 1994, Petroleum Sales, Inc., supplied petroleum products to Gold Hill. When Gold Hill required additional fuel, Phillip Carboy would telephone Petroleum Sales and place an order. Petroleum Sales would then deliver the product to Gold Hill and directly fill the appropriate tanks. Carboy did not instruct Petroleum Sales’ delivery personnel on how to fill the tanks during this process.
Gold Hill and Petroleum Sales are independent, separately owned, unaffiliated companies. Petroleum Sales did not oversee, manage, or operate the Gold Hill station and did not construct, install, maintain, or test the station’s tanks. Moreover, Gold Hill never asked or authorized Petroleum Sales to perform any such work.
Parks Hiway Enterprises, LLC, owned the parcel adjacent to the Gold Hill station. In 1994 the Alaska Department of Environmental Conservation (the Department) determined that benzene had contaminated the groundwater under Parks Hiway’s property. The Department identified Gold Hill as a probable source of the pollution. Gold Hill promptly removed its tanks, after which investigators discovered that the soil and groundwater surrounding the tank area were heavily contaminated with petroleum components. The rate of leakage was estimated at approximately one to two quarts per month over a twenty-year period.
Parks Hiway subsequently ceased drawing drinking water from its well. Parks Hiway suffered economic loss as a result of this action.
Parks Hiway sued the Carboys in 1995 and settled with them in 1996. In 1997 Parks Hiway filed an amended complaint naming Petroleum Sales as a defendant. Parks Hi-way’s amended complaint also named as defendants CEM Leasing, Inc., James E. Weymiller, Steven C. Winquist, and Phillip M. Tannehill. We refer to these defendants collectively as “Petroleum Sales.” The complaint alleged that Petroleum Sales was responsible for the soil and groundwater contamination of Parks Hiway’s property, and it
Petroleum Sales moved for summary judgment in March 1997. The superior court granted Petroleum Sales’ motion on December 16, 1997. Parks Hiway subsequently moved both for reconsideration and to file an amended complaint. The superior court agreed to reconsider its ruling. But in its January 23, 1998, order granting final judgment to Petroleum Sales, the court ultimately denied both of Parks Hiway’s motions.
Parks Hiway appeals the superior court’s grant of summary judgment to Petroleum Sales, the denial of its motion to submit an amended complaint, and the court’s refusal to strike two affidavits Petroleum Sales submitted during the summary judgment proceedings.
III. DISCUSSION
A. Standard of Review
We review grants of summary judgment de novo. 1 We will affirm the ruling if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. 2 We draw all reasonable inferences of fact in favor of Parks Hiway as the non-moving party. 3 Because this case involves various questions of law, we are not bound by the lower court’s decision and will instead adopt the rule of law “most persuasive in light of precedent, reason, and policy." 4
B. The Superior Court Did Not Err by Granting Summary Judgment to Petroleum Sales on Parks Hiway’s Statutory Strict Liability Claims.
1.
Petroleum Sales was not an “owner” or “person having control” under
a. Petroleum Sales was not an “owner” of the fuel at the time of the release.
Alaska’s hazardous substance statute defines “owner” for purposes of
We agree with the superior court. As a movable good, the fuel that Petroleum Sales supplied to Gold Hill was governed by AS 45.02, Alaska’s version of the Uniform Commercial Code (UCC).
9
b. Petroleum Sales ivas not the person “having control over the [fuel] at the time of the release."
producing, handling, storing, transporting, or refining a hazardous substance for commercial purposes immediately before entry of the hazardous substance into the atmosphere or in or upon the water, surface, or subsurface land of the state, and specifically includes bailees and carriers of a hazardous substance.
Echoing the superior court, Petroleum Sales reasons persuasively that it was not the person “having control” over the fuel when the soil and groundwater contamination occurred. Petroleum Sales had no operational or maintenance rights or responsibility at Gold Hill, and it owned neither the fuel nor the tanks into which the fuel was pumped. The supplier’s control over its product thus terminated upon the fuel’s transfer into Gold Hill’s storage tanks. 11
This argument remains factually dubious in light of the extremely slow and virtually undetectable rate of leakage from Gold Hill’s tanks. That only one to two quarts of fuel leaked from the tanks each month undercuts Parks Hiway’s assertion that the fuel was appreciably spilling out of the tanks as Petroleum Sales filled them.
Parks Hiway’s argument also fails under two separate rules of statutory construction. First, under the doctrine of
ejusdem generis,
we interpret the general definition of “having control” in
c. Legislative history
Parks Hiway contends that the legislative history of
Parks Hiway’s arguments concerning
2.
Petroleum Sales was not an “operator” under
The term “operator” is statutorily defined in relevant part as “any person ... operating the facility,”
14
a circular definition providing little guidance to the present inquiry.
15
However, the overwhelming majority of federal courts construing the equally cir
In construing “operator” for purposes of
Petroleum Sales did not exercise the actual control requisite to “operator” liability under section
3.
Petroleum Sales was not a “transporter” under
The superior court correctly ruled that Petroleum Sales was not a “transporter” as a supplier of gasoline (a “refined oil”), within the meaning of
In sum, Parks Hiway has failed to show that
C. The Superior Court Did Not Err by Rejecting Parks Hiway’s Trespass Theoi"y of Liability.
Trespass is an unauthorized intrusion or invasion of another’s land, 23 including subsurface areas. 24 Trespass liability may result from an actor’s intentional, negligent, or ultrahazardous conduct. 25
The superior court rejected Parks Hiway’s attempt to hold Petroleum Sales liable for common law trespass, ruling that Petroleum Sales did not own or control the fuel when it contaminated the groundwater beneath Parks Hiway’s property. Parks Hiway challenges this ruling, arguing that ownership of the invading substance is irrelevant for purposes of trespass liability where the actor “sets in motion” the release of the substance.
This court has not addressed the issue of whether a supplier of a substance is liable for trespass when, after delivery to the buyer, the substance escapes and invades neighboring land. Parks Hiway cites no authority explicitly recognizing a cause of action against the supplier under such circumstances. 26
Several cases have held that courts do not impose trespass liability on sellers for injuries caused by their product after it has left the ownership and possession of the sellers. 27 The courts in City of Bloomington v. Westinghouse Electric Corp., 28 Jordan v. Southern Wood Piedmont Co., 29 Town of Hooksett v. W.R. Grace & Co., 30 and City of Manchester v. National Gypsum Co. 31 accordingly refused to hold suppliers liable for trespass under facts roughly analogous to the present case.
The general consensus thus suggests that ownership or control of the intruding instrumentality is dispositive of an actor’s trespass liability. Because its ownership and control over the fuel terminated upon the product’s transfer into Gold Hill’s tanks, Petroleum Sales bears no trespass liability for the fuel’s subsequent migration.
Moreover, “a trespass action will exist if there is a
direct
causal relation between the conduct of the actor and the intrusion of
D. The Superior Court Did Not Err by Rejecting Parks Hiway’s Attempt to Hold Petroleum Sales Strictly Liable Under the Common Law Doctrine of Ultrahazardous Activity.
Strict liability attaches to actors engaged in ultrahazardous activities. 34 An activity is ultrahazardous if it “(a) necessarily involves a risk of serious harm ... which cannot be eliminated by the exercise of the utmost care, and (b) is not a matter of common usage.” 35 “What facts are necessary to make an activity ultrahazardous ... is a matter for the judgment of the court” rather than the jury. 36 In Matomco Oil Co. v. Arctic Mechanical, Inc., we suggested that hauling gasoline as freight represents an ul-trahazardous activity for which strict liability would apply. 37
The superior court, however, ruled that although transporting gasoline is an “ul-trahazardous activity,” strict liability would attach only to harm arising “from the risk which, being incapable of elimination by utmost care, makes the activity ultrahazar-dous.” Reasoning that transporting fuel was deemed ultrahazardous due solely to gasoline’s inherent volatility, the superior court refused to extend strict liability to harm falling outside the scope of the risk of explosion. The court thus rejected Parks Hiway’s attempt to hold Petroleum Sales strictly liable for environmental damage resulting from the fuel’s delivery. We agree with the superior court’s reasoning. 38
On appeal, Parks Hiway refines its argument to assert that transporting gasoline to defective tanks should constitute an “ultrahazardous” activity warranting strict liability. Parks Hiway relies upon City of Northglenn v. Chevron U.S.A., Inc., 39 and Yommer v. McKenzie, 40 which held operators of large underground gasoline storage facilities strictly liable for the contamination of neighboring property. But the persuasive value of Northglenn and Yommer to the present case remains extremely limited, as both opinions involved facility owners rather than suppliers or transporters of gasoline.
In the analogous case of
City of Bloomington v. Westinghouse Electric Corp.,
the court
We agree with Bloomington and refuse to hold Petroleum Sales strictly liable for contamination occurring after it delivered its product to Gold Hill. As in that ease, Parks Hiway’s injury resulted from Gold Hill’s failure to properly maintain its tanks rather than Petroleum Sales’ delivery of the fuel.
E. The Superior Court Did Not Err by Refusing to Hold Petroleum Sales Liable for Private Nuisance.
Private nuisance liability results from an intentional and unreasonable interference with another’s use and enjoyment of his or her own property. 44 Unintentional conduct may also warrant nuisance liability if negligent, reckless, or abnormally dangerous. 45 To incur liability, an actor’s conduct must be a substantial factor in causing the nuisance. 46
The superior court rejected Parks Hiway’s private nuisance theory, reasoning that “[o]ne who has no control over property at the time of the nuisance cannot be held liable therefor.” Echoing the court, Petroleum Sales accurately cites numerous cases that have refused to extend nuisance liability to hazardous material vendors uninvolved in the operation of the facility from which the pollution eventually migrated. 47 These courts agree that “liability for damage caused by a nuisance turns on whether the defendants were in control over the instrumentality alleged to constitute the nuisance.” 48 Moreover, at least one court has noted the absence of cases holding manufacturers liable for nuisance claims arising from the use of their products after sale. 49 The Restatement likewise couches its nuisance liability rule in terms of “the possessor of [the] land” from which the nuisance emanates. 50
Against this apparent judicial consensus, Parks Hiway cites
Shockley v. Hoechst Celanese Cor
p.
51
and
Northridge Co. v. W.R. Grace & Co.
52
Shockley
involved a manufacturer who “knowingly delivered rusty, aging, and leaking barrels of hazardous chemicals” to a waste disposal site operated by another entity.
53
Because the condition causing the nuisance, i.e., the leaking barrels, existed when the manufacturer delivered them to the property from which the contamination ultimately emanated, the court concluded
Northridge involved a suit for private nuisance against an asbestos manufacturer whose product was installed in a shopping mall. 55 The Wisconsin appellate court affirmed the manufacturer’s nuisance liability, reasoning that “one who has erected a nuisance will be responsible for its continuance, even after he has parted with the title and the possession.” 56
Northridge is distinguishable from the present case because there is no evidence that Petroleum Sales had any reason to know that a nuisance would result from filling Gold Hill’s tanks. Moreover, Petroleum Sales did not “erect a nuisance” by delivering gasoline to Gold Hill’s leaking tanks; the defective tanks, rather than the fuel migrating from them, constituted the nuisance.
Petroleum Sales did not control either Gold Hill’s tanks or the fuel when the contamination of Parks Hiway’s groundwater occurred. It was therefore not a substantial factor in creating the alleged nuisance and should bear no liability.
F. The Superior Court Did Not Err by Rejecting Parks Hnvay’s Negligence Claim.
The tort of negligence consists of four separate and distinct elements: (1) duty, (2) breach of duty, (3) causation, and (4) harm. 57 The existence and extent of a duty is a question of law. 58 The superior court rejected Parks Hiway’s negligence claim at the threshold level, ruling that Petroleum Sales owed no affirmative duty to investigate the status of Gold Hill’s tanks before transferring fuel into them. The court adopted a rule requiring claimants to show that a petroleum supplier had actual knowledge of the tanks’ defect.
Parks Hiway argues on appeal that (1) negligence requires only constructive knowledge; and (2)
We decline to address whether a petroleum supplier’s negligence liability requires actual or constructive knowledge of the tanks’ defective condition,
59
however, because Parks Hiway has not presented sufficient evidence to create a genuine issue of fact even under the “constructive knowledge” approach. The statutory and regulatory scheme cited by Parks Hiway imposes no affirmative duty upon petroleum suppliers to confirm the structural integrity of a customer’s tank before depositing fuel into it. First,
Drawing all reasonable inferences in Parks Hiway’s favor, Petroleum Sales owed no duty to investigate the soundness of the tanks under the circumstances of this case. We accordingly affirm the rejection of Parks Hi-way’s negligence claim. 63
IV. CONCLUSION
As a fuel distributor with no ownership, authority, or control over the Gold Hill Service Station, and no reason to know that Gold Hill’s tanks were leaking, Petroleum Sales is not liable for contamination caused by the leaking tanks. We therefore AFFIRM the superior court’s ruling in all respects.
Notes
.
See Nielson v. Benton,
.
See Voigt v. Snowden,
.
See Bishop v. Municipality of Anchorage,
.
Guin v. Ha,
. The text of
(a) Notwithstanding any other provision or rule of law and subject only to the defenses set out in (b) of this section, the exception set out in (i) of this section, the exception set out inAS 09.65.240 , and the limitation on liability provided underAS 46.03.825 , the following persons are strictly liable, jointly and severally, for damages, for the costs of response, containment, removal, or remedial action incurred by the state, a municipality, or a village, and for the additional costs of a function or service, including administrative expenses for the incremental costs of providing the function or service, that are incurred by the state, a municipality, or a village, and the costs of projects or activities that are delayed or lost because of the efforts of the state, the municipality, or the village, resulting from an unpermitted release of a hazardous substance or, with respect to response costs, the substantial threat of an unpermitted release of a hazardous substance:
(1) the owner of, and the person having control over, the hazardous substance at the time of the release or threatened release....
(2) the owner and the operator of a vessel or facility, from which there is a release, or a threatened release....
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(5) any person who accepts or accepted any hazardous substances, other than refined oil, for transport to disposal or treatment facilities, vessels or sites selected by the person, from which there is a release, or a threatened release that causes the incurrence of response costs, of a hazardous substance.
.
.
See Redwing Carriers, Inc. v. Saraland Apartments,
.
Redwing,
.
See Sinka v. Northern Commercial Co.,
.
See Estate of Lewis v. State, Commercial Fisheries Entry Comm'n,
.
See Edward Hines Lumber Co. v. Vulcan Materials Co.,
. See State Farm Fire & Cas. Co. v. Bongen,
.
See Homer Elec. Ass’n v. Towsley,
.
. See 4 William H. Rodgers, Jr., Environmental Law § 8.12(1992).
.
See id.; see also United States v. Bestfoods,
.
East Bay,
.
Bestfoods,
. "The goal of statutory construction is to give effect to the legislature's intent, with due regard for the meaning the statutory language conveys to others. In this respect, we have repeatedly stated that unless words have acquired a peculiar meaning, by virtue of statutory definition or judicial construction, they are to be construed in accordance with their common usage.”
McDowell v. State,
. We decline Parks Hiway’s invitation to follow
Shell Oil Co. v. Meyer,
.
. "Where a statute's meaning appears clear and unambiguous, ... the party asserting a different meaning bears a correspondingly heavy burden of demonstrating contrary legislative intent.”
University of Alaska v. Tumeo,
.
See Brown Jug, Inc. v. International Bhd. of Teamsters,
. See Restatement (Second) of Torts § 159 (1965).
. See Restatement (Second) of Torts §§ 158, 165 (1965).
. Parks Hiway’s reliance upon
McDowell v. State,
The other cases Parks Hiway
cites
— Shockley
v. Hoechst Celanese Corp.,
.
See, e.g., City of Bloomington v. Westinghouse Elec. Corp.,
. Id. (holding chemical manufacturer not liable for trespass where product caused contamination after sale and delivery to buyer).
.
.
.
.
Lever Bros. Co. v. Langdoc,
.
Burt v. Beautiful Savior Lutheran Church of Broomfield,
.
See Matomco Oil Co. v. Arctic Mech., Inc.,
.
Id.
at 1341-42 n. 13 (citing Restatement of Torts § 520 (1938)). We have adopted the First Restatement’s "ultrahazardous” standard over the “abnormally dangerous” test of the Second Restatement.
Id.
at 1341 n. 12;
State Farm Fire & Cas. Co. v. Municipality of Anchorage,
.
Matomco,
.
.
See
Restatement of Torts § 519 cmt. b (1938). We also find it noteworthy that the legislature expressly exempted gasoline transporters from strict liability under
.
.
.
. Id. at 615.
. Id. at 616.
. See Restatement (Second) of Torts § 822(a) (1965).
.
See
Restatement (Second) of Torts § 822(b) (1965). Alaska statutorily defines private nuisance as “a substantial and unreasonable interference with the use and enjoyment of real property, including water.”
. See Restatement (Second) of Torts § 834 (1965).
.
See Tioga Pub. Sch. Dist. No. 15 of Williams County v. U.S. Gypsum Co.,
.
City of Manchester,
.
See City of Bloomington,
. Restatement (Second) of Torts § 839 (1965).
.
.
.
. See id.
.
.
Id.
(quoting
Lohmiller v. Indian Ford Water Power Co.,
.
See Lyons v. Midnight Sun Transp. Servs., Inc.,
.
See Mulvihill v. Union Oil Co.,
. The superior court relied on
Citizens & S. Trust Co. v. Phillips Petroleum Co.,
.
(b) The owner or operator shall ensure that
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(4) the distributor is provided with the UST registration number before the transfer is made....
Subsection (b)(4) may imply a duty on the part of a distributor not to make deliveries to unregistered tanks. But the tanks in this case were all registered.
.
(b) In an action to recover damages or costs, a person otherwise liable under this section is relieved from liability under this section if the person proves
(1) that the release or threatened release of the hazardous substance to which the damages relate occurred solely as a result of
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(B) except as provided underAS 46.03.823(c) and 46.03.825(d), an intentional or negligent act or omission of a third party, other than a party or its agents in privity of contract with, or employed by, the person, and that the person
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(ii) took reasonable precautions against the act or omission of the third party and against the consequences of the act or omission....
.
. Parks Hiway also raises two procedural claims of error. It argues that the court should have stricken certain affidavits and should have allowed it to file a third amended complaint after summary judgment was granted. We have reviewed these claims and find no abuse of discretion.