ELR Citation: ELR 21333
No(s). 89 C 3536 (N.D. Ill. May 17, 1990)

The court holds that shareholders of a closely held corporation can be held responsible for the corporation's liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Plaintiff brought a CERCLA contribution action against selling shareholders of a corporation owning land contaminated with polichlorinated biphenyl (PCB). Plaintiff's complaint adequately sets forth sufficient facts so that the court could find that the corporation was closely held. The court notes that a shareholder may be liable under CERCLA if he could have prevented or significantly abated the hazardous substance release. Factors the court will consider include the individual's authority to control waste handling practices and responsibility undertaken for waste disposal. The court denies a motion to dismiss plaintiff's claim of failure to disclose a latent defect, because plaintiff need not allege that PCBs have caused any physical harm. The court denies motions to dismiss plaintiff's claims of negligence and strict liability, because defendants' status as officers of the corporation does not insulate them from liability. They could have actively participated in or authorized the disposal of PCBs on the property. The court denies motions to dismiss plaintiff's claims of breach of warranty and indemnification provisions contained in the contract of sale, because plaintiff's interpretation of these provisions is not impossible, and plaintiff's claims are not barred by the statute of limitations. Finally, the court denies a motion to dismiss plaintiff's claim of unjust enrichment, because the procedural status of the proceedings entitles plaintiff to raise claims of both breach of contract and unjust enrichment.

Counsel for Plaintiff
Terence M. Heuel, Nicholas F. Esposito, Mark A. Schram
Esposito, Heuel & Schramm
79 W. Monroe St., Ste. 1010, Chicago IL 60603
(312) 346-2766

Counsel for Defendants
Roseann Oliver, Jan Feldman, Allan T. Slagel
Phelan, Pope & John
180 N. Wacker Dr., Chicago Il 60606
(312) 621-0700

Daniel J. Dowd
Dowd, Dowd & Mertes
701 Lee St., Ste 790, Des Plaines IL 60016
(708) 827-2181