Pfohl Brothers Landfill Site v. Allied Waste Sys.

255 F.Supp.2d 134

PFOHL BROTHERS LANDFILL SITE STEERING COMMITTEE, Plaintiff, v. ALLIED WASTE SYSTEMS, INC. and GSX Polymers, Inc., Defendants.¹

No. 95-CV-956A.

United States District Court, W.D. New York.

March 27, 2003.

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Stephens & Stephens, R. Williams Stephens, of Counsel, Buffalo, for Plaintiff.

Beveridge & Diamond, P.C., James B. Slaughter, Gary J. Smith and Daniel M. Krainin, of Counsel, Washington, DC, for Plaintiff.

Webster, Szanyi, LLP, Nelson Perel and A. Timothy Webster, of Counsel, Buffalo, NY, for Defendants Allied Waste Systems, Inc. and GSX Polymers, Inc.

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Leslie G. Foschio, pursuant to 28 U.S.C. § 636(b)(1), on February 9, 1996. On May 15, 2001, plaintiff Pfohl Brothers Landfill Steering Committee filed a motion for partial summary judgment and defendants Allied Waste Systems, Inc. and GSX Polymers, Inc. ("GSX") filed a motion for summary judgment. On August 12, 2002, Magistrate Judge Foschio filed a Report and Recommendation, recommending that plaintiffs motion for partial summary judgment be granted in part and denied in part and that defendants' motion for summary judgment be granted in part and denied in part. Specifically, the Magistrate Judge recommended that summary judgment should: (1) as to whether the record establishes that defendant GSX's predecessor, U.S. Rubber Reclaiming Co., Inc. ("U.S.Rubber"), deposited hazardous substances into the Pfohl Brothers Landfill such that defendants are subject to CERCLA generator liability, be granted as to plaintiff and denied as to defendants; (2) as to plaintiffs CERCLA contribution claim based on successor liability of defendants, be granted in favor of plaintiff; (3) as to the imposition of a constructive trust upon defendants as requested by plaintiff in connection with the CERCLA contribution claim, be granted in favor of plaintiff; (4) as to plaintiffs fraudulent conveyance claim, be granted as to defendants because the claim is time-barred or, alternatively, plaintiffs constructive fraud claim should be granted as to plaintiff although the existence of material issues of fact preclude summary judgment on plaintiffs actual fraud claim; and (5) as to plaintiffs claim for piercing the corporate veil, be denied as to plaintiff and granted as to defendants.

Defendants filed objections to the Report and Recommendation on September 19, 2002. Plaintiff filed a response to the objections on October 18, 2002. Defendants filed a reply thereto on October 29, 2002. Oral argument on the objections was held on March 19, 2003.

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts the proposed findings of the Report and Recommendation.

Accordingly, for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation, summary judgment: (1) as to whether the record establishes that defendant GSX's predecessor, U.S. Rubber, deposited hazardous substances into the Pfohl Brothers Landfill such that defendants are subject to CERCLA generator liability is granted as to plaintiff and denied as to defendants; (2) as to plaintiffs CERCLA contribution claim based on successor liability of defendants is granted in favor of plaintiff; (3) as to the imposition of a constructive trust upon defendants as requested by plaintiff in connection with the CERCLA contribution claim is granted in favor of plaintiff; (4) as to plaintiffs fraudulent conveyance claim is granted as to defendants because the claim is time-barred; and (5) as to plaintiffs claim for piercing the corporate veil is denied as to plaintiff and granted as to defendants. The case is hereby referred back to Magistrate Judge Foschio for further proceedings.

IT IS SO ORDERED.

REPORT and RECOMMENDATION JURISDICTION

FOSCHIO, United States Magistrate Judge.

This case was referred to the undersigned by Honorable Richard J. Arcara on February 9, 1996, for pretrial matters including report and recommendation on dispositive motions. The matter is presently before the court on motions filed on May 15, 2001 by Plaintiff for partial summary judgment (Docket No. 187), and by Defendants Allied Waste Systems, Inc. and GSX Polymers, Inc. (collectively, "Defendants") ²

for summary judgment (Docket No. 191).

BACKGROUND

Plaintiff Pfohl Brothers Landfill Site Steering Committee commenced this contribution action on November 7, 1995, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601 et seq., as amended,³ seeking to recover from defendants Allied Waste Systems, Inc. and GSX Polymers, Inc. a portion of the costs Plaintiff voluntarily incurred in connection with the removal of various hazardous substances from a landfill located in the town of Cheektowaga, New York. Five amended complaints have been filed, and claims were first asserted against Defendants in the Fourth Amended Complaint, filed on June 11, 1999 (Docket No. 107) ("the Complaint" or "Complaint"), including a claim for contribution under CERCLA § 113(f)(1) (Count Four, 1111168-79), a claim for declaratory relief establishing the parties' rights and responsibilities with regard to the costs Plaintiff incurred in the investigation and remediation of hazardous substances at the Landfill based on corporate successor liability, constructive trust and alter ego (Count Five ¶¶ 180-83), and a claim for fraudulent conveyance in violation of the New York Uniform Fraudulent Conveyance Act, New York Debtor and Creditor Law ("N.Y. Debt. & Cred. Law") §§ 273 and 276 (McKinney 1990) (Count Seven, ¶¶ 184-87).

On May 15, 2001, Plaintiff filed a motion for partial summary judgment as to the Fourth, Fifth and Seventh Causes of Action set forth in the Fourth Amended Complaint. In support of the motion, Plaintiff filed a memorandum of law (Docket No. 188) ("Plaintiffs Memorandum"), a statement of facts pursuant to Fed. R.Civ.P. 56 (Docket No. 189) ("Plaintiffs' Rule 56 Statement of Facts"), and six volumes of exhibits. Also filed on May 15, 2001 was Defendants' motion for summary judgment seeking to dismiss all causes of action as against them. Defendants' motion was accompanied by a memorandum of law (Docket No. 192) ("Defendants' Memorandum"), the Affidavit of Nelson Perel, Esq. (Docket No. 193) ("Perel Affidavit"), a statement of facts pursuant to Fed.R.Civ.P. 56 (Docket No. 194) ("Defendants' Rule 56 Statement of Facts") and four volumes of exhibits.

On June 29, 2001, Defendants filed in opposition to Plaintiffs request for partial summary judgment an affidavit by Nelson Perel, Esq. (Docket No. 202) ("Perel Affidavit in Opposition to Partial Summary Judgment"), a memorandum of law (Docket No. 203) ("Defendants' Response Memorandum"), a response in opposition to Plaintiffs Rule 56 Statement of Facts (Docket No. 204), and two volumes of exhibits. In opposition to Defendants' motion for summary judgment Plaintiff, on June 29, 2001, filed a memorandum of law (Docket No. 207) ("Plaintiffs Response Memorandum"), a response in opposition to Defendants' Rule 56 Statement of Facts (Docket No. 208), and a Supplemental Appendix of exhibits.

Replies in further support of the summary judgment motions were filed on July 27, 2001. In particular, Plaintiff filed a reply memorandum of law (Docket No. 211) ("Plaintiffs Reply Memorandum"), the Declaration of Daniel M. Krainin (Docket No. 212) ("Krainin Declaration"), and another Supplemental Appendix of Exhibits. Defendants filed a reply memorandum of law (Docket No. 214) ("Defendants' Reply Memorandum"), an affidavit by Nelson Perel, Esq. (Docket No. 215) ("Perel Reply Affidavit"), and a volume of exhibits. By letter dated August 21, 2001, Attorney Perel advised the court that a case on which they relied in their previous motion papers in support of their argument that the Complaint fails to state a claim for a CERCLA contribution action had recently been affirmed. (Docket No. 236) ("August 21, 2001 Perel Letter"). Oral argument on the pending motions was deemed unnecessary.

Based on the following, the court finds that summary judgment should (1) as to whether the record establishes Defendant GSX Polymers, Inc.'s predecessor, U.S. Rubber, deposited hazardous substances into the Landfill such that Defendants are subject to CERCLA generator liability, be GRANTED as to Plaintiff and DENIED as to Defendants; (2) as to Plaintiffs CERCLA contribution claim based on successor liability of Defendants, be GRATNED in favor of Plaintiff; (3) as to the imposition of a constructive trust upon Defendants as requested by Plaintiff in connection with the CERCLA contribution claim, be GRANTED in favor of Plaintiff; (4) as to Plaintiffs fraudulent conveyance claim, be GRANTED as to Defendants because the claim is time-barred or, alternatively, Plaintiffs constructive fraud claim should be GRANTED as to Plaintiff but DENIED as to the actual fraud claim as the existence of material issues of fact preclude summary judgment on Plaintiffs actual fraud claim; and (5) as to Plaintiffs claim for piercing the corporate veil, be DENIED as to Plaintiff and GRANTED as to Defendants.

FACTS⁴

Plaintiff Pfohl Brothers Landfill Site Steering Committee ("the Steering Committee" or "Plaintiff), is comprised of various corporations that have voluntarily participated in the remediation measures at the Pfohl Brothers Landfill ("the Landfill"), which comprises 120 acres in the Town of Cheektowaga, New York. Beginning in the 1930s and continuing until approximately 1969, the Landfill began accepting waste materials from...