Reed v. Reid

980 N.E.2d 277

Hugh David REED, Appellant (Plaintiff below),

v.Edward REID ; Reid Machinery, Inc. ; North Vernon Drop Forge, Inc.; Jennings Manufacturing Co., Inc. ; Reid Metals, Inc. ; Glen White; Douglas Dibble; Midwest Environmental Services, Inc.; and Roger Crane, Appellees (Defendants below).

No. 40S01–1107–PL–436.

Supreme Court of Indiana.

Dec. 19, 2012.

Mark E. Shere, Indianapolis, IN, Attorney for Appellant.

Bryan H. Babb, Daniel P. McInerny, Bose McKinney & Evans LLP, Indianapolis, IN, R. Davy Eaglesfield, Courtney B. Justice, Justice Law Offices, Logansport, IN, Attorneys for Appellees.

RUCKER, Justice.

After a steel fabrication company deposited solid waste on a landowner's property the landowner filed a complaint seeking damages against multiple parties and on multiple grounds, including a claim for an environmental legal action. Both sides moved for summary judgment. The trial court granted the motions with respect to some claims and denied the motions with respect to others. We affirm the trial court in part, reverse in part, and remand this cause for further proceedings.

Facts and Procedural History

In this summary judgment action the undisputed facts as shown by the materials presented to the trial court are as follows. Plaintiff Hugh David Reed ("David")¹ owns property in Scipio, Indiana, part of which he operates as an auction barn and part of which he leases as a nursing facility. In early 2004 David planned to build or expand a parking lot on his property and as part of that project posted a handwritten sign on the front of his property requesting "Clean Fill" and listing his telephone number. In response to this posting, a highway department contractor provided David multiple loads of fill from a highway construction project. Also, in June 2004 an employee of North Vernon Drop Forge, Inc.² allegedly called David offering him fill. See Appellant's App. at 996. David visited the Forge facility and arrangements were made for Forge to deliver fill to David's parking lot. On the date of delivery and while the dumping of the fill was in progress, David noticed unexpected materials in the fill and suspended the dumping of Forge fill on his property.

Sometime in February of 2005 the Indiana Department of Environmental Management ("IDEM") presented Forge with a Notice of Violation Letter. Appellant's App. at 776–77. This letter informed Forge that IDEM had conducted an investigation of Forge for possible violations of environmental laws, and that IDEM found violations at the Forge site. Id. In response Forge hired an environmental consulting company to test Forge waste located at both the Forge site and at David's auction barn site. See Appellant's App. at 684. Forge received the results of this testing in May of 2007. See id.

In August of 2007 Forge entered into an Agreed Order with IDEM acknowledging that it "caused and/or allowed the disposal of solid waste in a manner which created a threat to human health or the environment, when it disposed of excavated soil mixed with mill scale, baghouse dust, refractory brick, and other debris, at Reed's Auction House in Scipio, Indiana...." Appellant's App. at 675. Forge further agreed to comply with environmental regulations in the future and agreed to waive its right to administrative and judicial review of IDEM's Order. See Appellant's App. at 675–76. The Order also provided that Forge was being assessed a penalty of "Zero Dollars," which IDEM confirmed "reflects a significant reduction based on the evidence submitted by [Forge] which adequately demonstrated an inability to pay." Appellant's App. at 676.

Then in late August or early September 2007 David also received a Notice of Violation letter from IDEM declaring, as a result of an investigation, IDEM had determined that "violations of environmental management laws and rules" exist at the auction barn site. Appellant's App. at 184. Specifically, IDEM's letter alleged that David had "allowed contaminants and waste into the environment," "deposited contaminants" upon his land creating a "pollution hazard" in a "method not acceptable to the solid waste management board," and that he had "caused and allowed ... restricted waste" to be disposed of on his property "in a manner which creates a threat to human health or the environment." Appellant's App. at 186–87. IDEM included with the letter a proposed "Agreed Order" which required David to "clean up the Type III restricted waste at the Site by excavating all of it, as well as six inches beyond the waste," "dispose of the excavated soil and waste at a facility authorized to accept restricted waste," and "submit documentation to IDEM that the restricted waste ... has been cleaned up and disposed of at a facility authorized to accept restricted waste."³ The proposed order also assessed David a civil penalty of $6,250.00 for the violations. Appellant's App. at 190.

David then went to Forge,⁴ obtained the telephone number of Forge owner Edward Reid ("Edward"), and called Edward to tell him about the letter and "asked him what he was going to do about it." Edward told David he would "take care of it." Appellant's App. at 176–77 (Reed Dep. at 53–56). As a result of this conversation, David was eventually put in contact with the Forge's attorney, who requested David to fax him the IDEM documents, and later informed David that he couldn't help him and that David needed to hire his own environmental lawyer. Appellant's App. at 177 (Reed Dep. at 58–59). David obtained counsel to negotiate with IDEM regarding the Notice of Violation and proposed order.

In or around August 2008 David hired HydroTech, Inc., an environmental consulting company, to remediate his property according to IDEM's instructions. Appellant's App. at 182 (Reed Dep. at 78–79). Upon completion of the remediation, IDEM issued to David's attorney a "Resolution of Case" letter declaring that the agency had reviewed HydroTech's report documenting removal of the contaminated soil. Appellant's App. at 733. Ultimately David did not sign the Agreed Order. In any event IDEM waived David's civil penalties. See Tr. at 43.

In the meantime on May 2, 2008 David filed a fourteen count complaint against Forge, its employees: Roger Crane, Douglas Dibble, and Gen White, and Forge's environmental consultant—Midwest Environmental Services, Inc. Also named in the complaint is Edward Reid—owner of Forge—along with three other companies Edward owns: Jennings Manufacturing, Inc., Reid Machinery, Inc., and Reid Metals, Inc. (All of whom we refer to collectively as "the Defendants").⁵

Seeking damages related to Forge waste David's complaint sets forth multiple theories of liability including statutory claims for environmental legal action, illegal dumping, and nuisance and common law claims of negligence, fraud, trespass, breach of contract, unjust enrichment, and reckless endangerment. David filed a motion for summary judgment on his environmental legal action claim and sought a summary determination that Edward individually as well as the corporations he controlled were liable through various corporate liability theories. The Defendants filed cross motions for summary judgment on David's environmental legal action claim and some of David's claims to impose corporate liability. The Defendants filed separate motions for summary judgment on all of David's other substantive claims except for his claim of negligence. And the Defendants moved for summary determination that particular items of damages were unavailable to David. The trial court denied David's motions and granted the Defendants' motions as to all claims, leaving for trial only David's negligence claim and the claims of potential liability against Edward individually and Reid Machinery, Inc. After a somewhat tortuous journey which resulted in the Court of Appeals dismissing David's appeal on procedural grounds, we granted transfer and now proceed to review the merits of the trial court's decision.⁶ Additional facts are set forth below as necessary.

Standard of Review

When reviewing a grant or denial of a motion for summary judgment our standard of review is the same as it is for the trial court. Kroger Co. v. Plonski, 930 N.E.2d 1, 4 (Ind.2010). The moving party "bears the initial burden of making a prima facie showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law." Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d 633, 637 (Ind.2012). Summary judgment is improper if the movant fails to carry its burden, but if it succeeds, then the nonmoving party must come forward with evidence establishing the existence of a genuine issue of material fact. Id. In determining whether summary judgment is proper, the reviewing court considers only the evidentiary matter the parties have specifically designated to the trial court. See Ind. Trial R. 56(C), (H). We construe all factual inferences in the non-moving party's favor and resolve all doubts as to the existence of a material issue against the moving party. Plonski, 930 N.E.2d at 5. The fact that the parties have filed cross-motions for summary judgment does not alter our standard for review, as we consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law. Hardy v. Hardy, 963 N.E.2d 470, 473 (Ind.2012).

Discussion

David contends the trial court erred in granting summary judgment to the Defendants on his numerous substantive claims and argues instead that he is entitled to summary judgment as a matter of law as to one of his statutory claims and that issues of material fact remain on the other claims, precluding summary judgment on those claims. David further argues the trial court erred by granting summary judgment in favor of Reid Metals, Jennings Manufacturing, and Edward on David's various theories of corporate liability, and that summary judgment in his favor was warranted on those issues. We address these...