ELR Citation: ELR 21336
No(s). 89 Civ. 6865 (RWS) (S.D.N.Y. Jan 25, 1994)

The court holds that material questions of fact regarding when a dry cleaning operation ceased disposing of hazardous substances preclude summary judgment on the landowner's innocent purchaser and third-party affirmative defenses to liability under the Comprehensive Environmental Response, Compensation, and Liability Act. The government initiated an action against the landowners, and others, for response costs stemming from remedial action at the site. The landowners had purchased the property in 1979, taking title to a lease that provided for some of the property to be used and occupied as a dry cleaning establishment. Although the dry cleaner admittedly disposed of perchloroethylene (PCE)-infused wastewater through a floor drain, he claims that he ceased this practice in 1978, before the landowners took title to the property, and not in 1991 as the government maintains. The court previously had held that triable issues of fact regarding the date that disposal ceased remained as to the landowner's two affirmative defenses. The government contends, however, that two recently discovered facts resolve these issues and make them ripe for summary judgment. First, the government showed evidence that the dry cleaner leased its premises directly from the owner of the property since 1990. Second, the dry cleaner had conceded, in an answer to a recent interrogatory, that the dry cleaning operation had disposed of ironing machine condensate at the property until 1991.

Addressing the innocent landowner defense, the court holds that the dry cleaner's response, which appears to contradict directly an earlier statement that disposal stopped in 1983, does not eliminate the triable issue of material fact because summary judgment is inappropriate when the fact turns on the credibility of a witness. Although the government attempts to resolve the apparent contradiction by distinguishing the general question about waste disposal practices from the "specific question" about one of the individual wastes disposed of by the facility, the government fails to explain why the dry cleaner's answers should have differed by eight years. The court also holds that questions of fact regarding when disposal ceased preclude summary judgment on the third-party defense because the defense is unavailable if the release was caused by a third party's act or omission that occurred in connection with a contractual relationship existing at the time of the act or omission. Because the time that disposal ceased remains a genuine issue of material fact, the court denies summary judgment on the third-party defense.

Counsel for Plaintiff
Mary Jo White, U.S. Attorney
U.S. Attorney's Office
One St. Andrew's Plaza, New York NY 10007
(212) 791-0008

Counsel for Defendants
Lynn Wright, Susan S. Egan
Edwards & Angell
750 Lexington Ave., New York NY 10022
(212) 308-4411