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COURT OF APPEALS DECISION DATED AND RELEASED MARCH 4, 1997 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-1931
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
GOODMAN FOREST
INDUSTRIES, LTD.,
Plaintiff-Appellant,
v.
LOUISIANA-PACIFIC
CORPORATION,
Defendant,
ALLIEDSIGNAL, INC. and
EM SECTOR HOLDINGS, INC.,
Defendants-Respondents.
APPEAL from a judgment
of the circuit court for Marinette County:
CHARLES D. HEATH, Judge. Reversed
and cause remanded.
Before Cane, P.J.,
LaRocque and Myse, JJ.
LaROCQUE, J. Goodman Forest Industries, Ltd., appeals a
summary judgment in favor of AlliedSignal, Inc., and EM Sector Holdings, Inc.
(collectively, "respondents") dismissing them as defendants in Goodman's
suit for damages because the complaint was filed outside the six-year statute
of limitations, § 893.52, Stats.[1] Goodman asserts that a genuine issue of
material fact remains whether Goodman used reasonable diligence to discover
environmental contamination existing on property purchased from defendant
Louisiana-Pacific.[2] We agree and therefore reverse.
Goodman purchased a
sawmill operation consisting of almost 200 acres of real estate and personal
property from Louisiana-Pacific in October 1983. In 1986, Goodman learned that three fuel oil tanks on the
property were leaking contaminants into the surrounding soil. The Wisconsin Department of Natural
Resources advised Goodman to take remedial action to clean up the resulting
contamination. In a letter, the DNR
stated that "The Department recommends that you contact a consulting firm
.... The investigative work should
begin as soon as possible due to the short time remaining during the present
construction season." The tanks
were removed in 1986. The same letter
refers to additional underground storage tanks and advises Goodman to contact
the DNR when it removes the tanks, which Goodman indicated would be "in
the near future." These tanks were
removed in 1988.
In 1987, the DNR ordered
Goodman to close an unlicensed landfill on the property. Due to environmental concerns, the DNR also
advised Goodman to take remedial action to clean up the landfill and to monitor
the landfill.
In "late 1993 or
early 1994," Goodman initiated an Environmental Site Assessment (ESA) on
the entire property, the results of which were received in March 1994. The ESA revealed a number of additional
areas of environmental concern, including contamination surrounding the
underground tanks removed in 1988, a contaminated area used for equipment
maintenance, a contaminated area used to treat lumber, and a highly
contaminated former chemical manufacturing plant.
Goodman initiated this
lawsuit in 1992, before the ESA was performed, demanding reimbursement from
Louisiana-Pacific for the costs of environmental remediation and
monitoring. An amended complaint was
filed on January 16, 1995, naming AlliedSignal and EM Sector's predecessors in
interest as defendants and including the areas identified in the ESA. On March 20, 1995, the parties stipulated
that Louisiana-Pacific, AlliedSignal and EM Sector were the proper
defendants.
The respondents filed a
motion to dismiss them as defendants, asserting that the amended complaint was
untimely under § 893.52, Stats. In their motion, respondents argued that
because the complaint naming them as defendants was filed on January 16, 1995,
Goodman's cause of action against them must have arisen within the six-year
period immediately prior to that date.
If the cause of action arose prior to January 16, 1989, they argued, the
suit would be barred. Respondents
asserted that Goodman either discovered, or with reasonable diligence should
have discovered, the existence of the cause of action before January 16, 1989.
The trial court accepted
additional evidentiary materials from the parties, treating the motion as one
for summary judgment. The trial court
granted the motion, finding that as a matter of law Goodman either discovered
or should have discovered the contamination before January 16, 1989. The court stated:
It's clear to the Court that the
plaintiff did discover or, in the exercise of reasonable diligence, should have
discovered that they had a contamination problem before January 16, 1989, which
is six years prior to the time that the amended complaint was filed bringing in
[the Respondents]. The most recent
event is the removal of the three underground storage tanks in 1988. That certainly would give the plaintiff
cause for concern, especially in light of the history of this site when, as
[Goodman's counsel] said, the DNR was all over this property and sent the
plaintiff that letter back in 1986 ... outlining the contamination found around
the leaky fuel oil tanks.
So
given the history of this site and how they found the underground gasoline
storage tanks and they moved them in 1988, the cause of action accrued at that
time and [Respondents] were not brought into the case until January of
1995. So the action against them is
barred by the statute of limitations.
In reviewing the grant
of a summary judgment motion, we are required to apply the standards set forth
in § 802.08, Stats., in the same
manner as the trial court. Voss
v. City of Middleton, 162 Wis.2d 737, 748, 470 N.W.2d 625, 629
(1991). Those standards have been
described numerous times by this court, including in Grams v. Boss,
97 Wis.2d 332, 338, 294 N.W.2d 473, 476-77 (1980), and need not be repeated
here. However we do note that when
reviewing the parties' submissions, we must draw every inference in favor of
the party opposing the motion. Id.
at 339, 294 N.W.2d at 477. If those
submissions are subject to conflicting interpretations or if reasonable people
may differ as to their significance, summary judgment is inappropriate. Id.
Pursuant to § 893.52, Stats., a party must file its complaint
seeking recovery for damages for injury to real property "within 6 years
after the cause of action accrues or be barred ...." A cause of action for environmental
contamination of real property accrues when the plaintiff discovered or should
have discovered the contamination. See
Stroh Die Casting Co. v. Monsanto Co., 177 Wis.2d 91, 103, 502
N.W.2d 132, 136 (Ct. App. 1993). Our
supreme court has determined that plaintiffs must use reasonable diligence in
investigating and discovering contamination and its causes:
the
rule is settled in this state that the expansion of the discovery rule carries
with it the requirement that the plaintiff exercise reasonable diligence, which
means such diligence as the great majority of persons would use in the same or
similar circumstances. Plaintiffs may
not close their eyes to means of information reasonably accessible to them and
must in good faith apply their attention to those particulars which may be inferred
to be within their reach.
Id. (quoting
Spitler v. Dean, 148 Wis.2d 630, 638, 436 N.W.2d 308, 311 (1989)
(citation omitted)).
We conclude that there
remain genuine issues of material fact for trial.[3] Specifically, there is a legitimate factual
dispute as to whether Goodman used reasonable diligence in discovering the
contamination identified in the ESA.
Ordinarily, the date of discovery is a question of fact for the
jury. Stroh Die Casting,
177 Wis.2d at 104, 502 N.W.2d at 137.
Goodman discovered
contamination around the buried fuel oil tanks in 1986 and around the
unlicensed landfill in 1987. The DNR
advised Goodman to investigate, remedy and monitor the contamination around
those particular sites. In addition,
Goodman was aware of the additional underground storage tanks in 1986, and was
advised by the DNR to notify it when it removed those tanks. Goodman concedes that recovery from
respondents for these claims is barred.
However, whether Goodman
used reasonable diligence in discovering those areas identified in the ESA that
are unrelated to the above contaminated sites is a factual dispute remaining
for the jury. The property in question
is a very large tract consisting of almost 200 acres. Although Goodman undeniably was aware of the buried fuel oil
tanks, the unlicensed landfill and the additional underground storage tanks
prior to January 16, 1989, there are competing reasonable inferences whether it
had reason to suspect additional areas of contamination prior to that
date, particularly areas located in different parts of the property. The DNR advised Goodman to investigate,
remedy and monitor only the areas surrounding the buried fuel oil tanks and the
unlicensed landfill. It did not advise
Goodman to investigate the remaining portions of its property for
contamination. Under these
circumstances, a question of fact remains whether initiating this investigation
in late 1993 or early 1994 was consistent with reasonable diligence.
Drawing every inference
in favor of Goodman, as we must when reviewing a summary judgment, there is
conflicting evidence as to whether Goodman used reasonable diligence in
discovering the areas of contamination identified by the ESA. For this reason summary judgment was
inappropriate in this case.
By the Court.—Judgment
reversed and cause remanded for further proceedings.
Not recommended for
publication in the official reports.
[1] The parties do not dispute that § 893.52, Stats., is the relevant statute of limitations in this action. That section states as follows: "An action, not arising on contract, to recover damages for an injury to real or personal property shall be commenced within 6 years after the cause of action accrues or be barred, except in the case where a different period is expressly prescribed."