Underground Storage Tanks; Remediation of Contaminated Soil

Western Ohio Pizza v Clark Oil & Refining Corporation, 704 NE 2d 1086.

Facts: Western signed a standard purchase agreement for the purchase of a lot from Clark. The agreement included the following wording: "Buyer is aware underground storage tanks are still on the property and agrees to assume all responsibility for said tanks." Western subsequently discovered contaminated soil. An Indiana Department of Environmental Management inspector orally ordered Western to remediate the soil. The contaminated soil was then removed. Western filed a complaint against Clark claiming that Clark was liable to pay for the removal of the soil, for lost profits, and for punitive damages under the Indiana Underground Storage Act (IC 3-23-13-8) and the Illegal Dumping Statute (IC 13-30-3-13). Trial court found for Clark.

Holding: Affirmed. When Western agreed to "assume all responsibility for said tanks," it necessarily and unambiguously accepted responsibility for whatever those tanks and lines contained. Therefore, Western cannot recover from Clark for the cost of removal of the contaminated soil under IC 3-23-13-8. Also, even if Western had not assumed responsibility, it would not be able to recover since at the time of the conveyance the statute provided for recovery only after the state had required the current owner to take corrective action. In this case, there was only an informal verbal order by a state representative, not an official written order. Moreover, since the contract was sufficient to transfer liability for the costs of remediation under IC 3-23-13-8, it is likewise sufficient to transfer responsibility under IC 13-30-3-13.

ILLINOIS ANALYSIS: Assuming that the seller had satisfied the requirements of the Property Transfer Act (765 ILCS 90/1), this case would likely have the same result in Illinois. Although innocent purchasers are generally protected from liability under 415 ILCS 5/22.2 of the Environmental Protection Act, the facts of this case suggest that the soil removal was voluntary, since no official notice was given.

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