ELR Citation: ELR 20536
No(s). CIV. 98-00272SPK (D. Haw. Mar 8, 2002)

The court grants in part and denies in part several motions and cross-motions for summary judgment as to the potential Comprehensive Environmental Response Compensation, and Liability Act (CERCLA) liability and possible attendant indemnification of a Hawaiian property owner and several current and prior leaseholders of the property. In 1965, the fee owner leased the property to a company and required indemnity for all violations of law that resulted in suit or damages. In 1983, the leaseholder assigned the lease in the property back to the fee owner. That assignment included a provision by which the fee owner convenanted to indemnify the leaseholder for any liability. The fee owner then leased the property to a company that assigned its interests in the property to another company, which then sold its leasehold interest in the property to the current leaseholder. The current leaseholder discovered pollution at the site, began recovery operations, and initiated a CERCLA §107 cost recovery action and several state-law claims against the fee owner and the prior leaseholders. The court first holds, however, that the fee owner cannot be required to indemnify the current leaseholder under the indemnity provision in the 1982 assignment back to the fee owner. The indemnity provision applies to future liability under the remainder of that lease and not to past possible liability. The court next holds that because issues of fact remain as to whether the current leaseholder contributed to the pollution at the property either through disposal or passive migration from a leaking underground storage tank, the court cannot declare that the current leaseholder is not obligated to defend or indemnify the fee owner under the indemnity provision of the lease. The court further holds that it is premature to determine if the current leaseholder is strictly liable as a CERCLA potentially responsible (PRP) because issues of fact remain as to whether the current leaseholder qualifies for the innocent landowner defense under CERCLA §107(b)(3). The court also holds that the current leaseholder's CERCLA §107 cost recovery action cannot be dismissed because the leaseholder might be able to proceed with the action if it qualifies as an innocent landowner. Finally, it is premature to determine if several of the prior leaseholders are not PRPs.

The full text of this decision is available from ELR (18 pp., ELR Order No. L-472).

Counsel for Plaintiff
Paul Alston
Alston, Hunt, Floyd & Ing
1001 Bishop St., 18th Fl., Honolulu HI 96813
(808) 524-1800

Counsel for Defendants
Bert T. Kobayashi
Kobayashi, Sugita & Goda
999 Bishop St., Ste. 2600, Honolulu HI 96813
(808) 539-8700