ELR Citation: ELR 20345
No(s). 91-186 (D. Vt. Sep 2, 1993)

The court holds that the defendant, a tenant of a contaminated site, is not entitled to recover response costs on his counterclaim against the plaintiff site owners, and awards the owners attorney fees for the costs of pursuing their rights under the lease agreement. The court first holds that under Vermont contract law, the lease agreement effectively allocated responsibility for environmental response costs between the owners and the tenant. The language of the lease indicates that the parties intended that each bear responsibility for his own failure to comply with applicable laws. The court holds that the jury's finding that the owners did not cause the tenant to incur response costs does not bar the tenant from recovering response costs. Causation is not an element of liability for response costs under §107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) or under the Vermont Waste Management Act (VWMA). The court holds that the tenant may not introduce any evidence not introduced at trial because the parties expressly agreed that all evidence would be presented at trial.

The court next holds that the owners and the tenant are prima facie liable under CERCLA and the VWMA. The court concludes that the owners are potentially responsible parties, the site is a facility, a release of a hazardous substance occurred, the release caused the tenant to incur response costs in monitoring and investigating the site, and the response actions are consistent with the national contingency plan. Additionally, the tenant is a potentially responsible party because the contamination occurred during his occupancy of the site. Relying on equitable principles, the court holds that the tenant is not entitled to recover its response costs under CERCLA or the VWMA. Both the owners and the tenant used hazardous chemicals at the site, but any chemicals released by the owners migrated off-site before they brought suit. Additionally, the tenant concealed from the owners and the government the presence of contamination that he discovered when he investigated the site prior to entering into the lease agreement. Finally, the court awards the owners attorney fees incurred in pursuing their claims under the lease agreement and for their work with the Vermont Agency of Natural Resources, but holds that attorney fees the owners incurred in their defense against the tenant's counterclaim and in pursuing their claim for attorney fees are not recoverable.

Counsel for Plaintiff
Craig Weatherly
Gravel & Shea
Corporate Plaza
76 St. Paul St., P.O. Box 369, Burlington VT 05402
(802) 658-0220

Counsel for Defendant
Peter W. Hall
Abell, Kenlan, Schwiebert & Hall
71 Allen St., P.O. Box 578, Rutland VT 05701
(802) 773-3300