ELR Citation: ELR 20476
No(s). 93-5553 (5th Cir. Dec 28, 1994)

The court holds that under Louisiana law, a subsequent real property purchaser and assignee of leases must indemnify the former site owner and lessor for response costs incurred under state law and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) arising from contamination that the lessee/assignor's wood treatment facility operations caused at the site before the sale and assignment. The court first holds that the indemnification agreements between the lessor and lessee were intended to cover all forms of liability, including liability under CERCLA and state law, even though environmental liability under these laws was not specifically contemplated at the time of contracting. The agreement's broad language shows a strong intent by the lessee to indemnify the lessor for all liability arising in connection with the occupancy or use of the land. The court also holds that the indemnity clauses were intended to bind the lessee personally and were transferable to the assignee. The indemnity clauses were intended to create personal obligations, and those obligations were heritable under state law. The court also holds that an assumption agreement between the lessee/assignor and the assignee displayed the assignee's intent to assume all of the lessee/assignor's obligations under the lease. The language of the agreement clearly expresses the assignee's intent and the agreement does not contain limiting language. The court holds that the solidarity between the lessee/assignor and the assignee creates a special relationship that renders each of them individually liable for the whole performance. Without an express novation of the leases, this solidarity is unaffected and the former site owner and lessor retains the option to seek indemnity from either the lessee/assignor or the assignee. Finally, the court holds that the assignee is not entitled to contribution from a subsequent purchaser and assignee. The assignee failed to show that any hazardous waste was disposed of during the subsequent purchaser's period of ownership. Therefore, the subsequent purchaser is not a CERCLA or state-law responsible party and is not liable for any portion of the assignee's cleanup costs.

Counsel for Plaintiff
Jay A. Canel
Canel, Davis & King
10 S. La Salle St., Ste. 3400, Chicago IL 60603
(312) 372-4142

Counsel for Defendants
Steven Danekas
Wildman, Harrold, Allen & Dixon
222 W. Wacker Dr., 30th Fl., Chicago IL 60606
(312) 201-2000

Before POLITZ, Chief Judge, and GOLDBERG and DUHE, Circuit Judges.