ELR Citation: ELR 20132
No(s). 92-1476 (4th Cir. Aug 23, 1993)

The court holds that a district court improperly certified as final under Federal Rules of Civil Procedure 54(b) a judgment on a land purchaser's state-law claim against a seller for negligent failure to disclose contamination of the property, and the court remands the decision to the district court with instructions to withhold entry of judgment on the claim until after the district court resolves claims under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The district court had bifurcated the CERCLA and state claims, and entered final judgment on the state claim after a jury awarded the purchaser $1,029,830.82 in actual damages, $1,000 in punitive damages, and $1,064,313.63 on prejudgment interest on the state claim.

The court holds that damages under negligent nondisclosure claims and CERCLA are inextricably intertwined when pursued together, because a CERCLA cleanup will increase the value of the damaged property. A danger of double recovery exists because the measure of damages under the "benefit of the bargain" rule in South Carolina, where the property is located, is the difference between the value of the property at the time of sale and the value of the property as falsely represented. South Carolina law does not contemplate that the value of the property once contaminated will be restored. If allowed to stand, the judgment on the negligent nondisclosure claim could allow the purchaser not only to recover the purchase price of the property and the cost of improvements in the form of consequential damages, but also could allow the purchaser to reap the benefits—the increased value of the property—from the CERCLA cleanup as well. A double recovery is inconsistent with South Carolina law. Thus, the district court abused its discretion in finding no just reason for delay in the entry of judgment on the negligent nondisclosure claim.

A dissenting judge would affirm the district court's decision, because the state common-law claims are separable from the CERCLA claims, and no appellate court would be required to address these issues again on appeal from a verdict on the CERCLA claims.

Counsel for Appellee
Lemuel G. Geddie Jr.
Ogletree, Deakins, Nash, Smoak & Stewart
The Ogletree Bldg., 300 N. Main St., P.O. Box 2757, Greenville SC 29602
(803) 271-1300

Counsel for Appellant
Elmer A. Simpson Jr.
Powell, Goldstein, Frazer & Murphy
191 Peachtree St. NE, 16th Fl., Atlanta GA 30303
(404) 572-6600

Before HAMILTON and LUTTIG, Circuit Judges, and WARD, Senior United States District Judge for the Middle District of North Carolina, sitting by designation.