ELR Citation: ELR 21364
No(s). 92 C 4836 (N.D. Ill. Mar 30, 1995)

The court holds that a prior judgment that former owners of a contaminated site are liable to the current owner for response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not collaterally estop the current owner from asserting a claim against an environmental consulting company for negligent misrepresentation damages allegedly arising out of the same injury. After the court, in the prior action, found the former owners liable for necessary future response costs, the current and former owners executed a settlement agreement resolving all issues between them relating to the site. The agreement also discharged the former owners from tort liability for their actions in connection with the site. In the current action, the court first holds that collateral estoppel does not preclude the current owner's claim against the consulting company, because the prior litigation decided the former owners', not the consulting company's, liability. For the same reason, CERCLA §113(g)(2) does not prevent the current owner from attempting to establish under common law that the consulting company is liable for the same response costs as the former owners. In addition, although CERCLA §114(b) forbids double recoveries, the current owner and the consulting company's stipulation that the settlement agreement discharged the former owners from liability for the prior judgment does not demonstrate that the current owner will receive a double recovery if it is permitted to seek damages in this action, because the stipulation does not state that the former owners satisfied the prior judgment. The settlement agreement would not discharge the consulting company under the Second Restatement of Torts, because the agreement did not provide for that discharge. And Illinois' election of remedies doctrine does not preclude the current owner from seeking future response costs against the consulting company, because the consulting company has not demonstrated that the judgment against the former owners has been satisfied.

Counsel for Plaintiffs
Arthur M. Holtzman
Pedersen & Houpt
161 N. Clark St., Ste. 3100, Chicago IL 60601
(312) 641-6888

Counsel for Defendant
David A. Bonoma
Pope, Cahill & Devine
311 S. Wacker Dr., Ste. 4200, Chicago IL 60606
(312) 362-0200