ELR Citation: ELR 20183
No(s). 91-2039 (6th Cir. Sep 1, 1992)

The court holds that the seller of a former gasoline station site contaminated with hydrocarbons is entitled to summary judgment in the purchasers' action for recovery of cleanup costs incurred at the site, because under the purchase agreement the plaintiffs assumed liability and took the property "as is." The court first holds that it need not consider the plaintiffs' argument that the parties could not have contemplated a transfer of liability under the terms of the Michigan Leaking Underground Storage Tanks (LUST) Act because the Act became effective two years after the date of the contract, since the plaintiffs did not raise this issue in the district court. The court next holds that the contract's plain language demonstrates that the parties contemplated that the defendant would be released from damages resulting from defects in, and conditions on, the property. The court rules that, although provisions in the LUST Act on the transferability of liability seem contradictory, the more palatable and consistent interpretation is that parties responsible for contamination cannot escape their liability for cleaning up the property, but they may allocate the cleanup costs between themselves. Accordingly, the court holds that the purchase agreement validly transferred liability for the costs of the cleanup to the plaintiffs. The court holds that it need not consider the plaintiffs' argument that the purchase agreement's indemnification clause requires a government cleanup, which did not occur, because this argument was never raised in the district court. The court, nonetheless, notes that the argument is fruitless, because it is the plaintiffs who attempted to invoke government regulation. If they had been able to recover under the LUST Act, then there would have been governmental action that would have evoked the indemnity clause.

The court next holds that the plaintiffs failed to show any type of fraudulent concealment by the seller, because they were well aware that the property had been used as a gasoline station and were given carte blanche to conduct an inspection of the property. Furthermore, there has been no showing that the defendant was aware that the property was contaminated or that underground storage tanks on the property had leaked. Moreover, the defects in the property should have been discoverable had the plaintiffs bothered to do any type of serious inspection. The court holds that the plaintiffs' argument that Michigan law prohibits the contract's "as is" clause from being enforced is without merit, because they failed to show both that an unreasonable danger was involved and that any third party suffered any damage. The court holds that the plaintiffs are not entitled to recovery as the owners of land adjacent to the contaminated parcel, because the purchase agreement for the contaminated parcel expressly holds the buyers responsible for any damages caused by the conditions of the property, including soil conditions. Finally, the court holds that summary judgment for the defendant is appropriate because there is no genuine issue of material fact.

[The district court's opinion is published at 22 ELR 20503.]

Counsel for Plaintiffs-Appellants
William J. Stapleton
Hooper, Hathaway, Price, Beuche & Wallace
126 S. Main St., Ann Arbor MI 48104
(313) 662-4426

Counsel for Defendant-Appellee
Mark F. Miller
Denardis, McCandless & Muller
800 Buhl Bldg., Detroit MI 48226
(313) 963-9050

Before: KEITH and MILBURN, Circuit Judges; and CELEBREZZE, Senior Circuit Judge.