Wells Enterprises v. Wells Bloomfield, LLC et al, No. 3:2011cv00246 - Document 79 (D. Nev. 2014)

Court Description: ORDER denying 76 Motion to Certify Judgment as Final. Signed by Judge Robert C. Jones on 4/17/2014. (Copies have been distributed pursuant to the NEF - KR)
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Wells Enterprises v. Wells Bloomfield, LLC et al Doc. 79 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 1 2 3 4 WELLS ENTERPRISES, Plaintiff, 5 vs. 6 7 WELLS BLOOMFIELD, LLC et al., 8 Defendants. 9 ) ) ) ) ) ) ) ) ) ) ) ) ) 3:11-cv-00246-RCJ-VPC ORDER 10 11 This case arises out of the contamination of a piece of real property. Pending before the 12 Court is a Motion to Certify Judgment as Final (ECF No. 76). For the reasons given herein, the 13 Court denies the motion. 14 I. FACTS AND PROCEDURAL HISTORY 15 16 Plaintiff Wells Enterprises leases commercial real estate. (Beckett Dep., ECF No. 53-3, at 17 12). One of the pieces of commercial real estate that Wells Enterprises leases is property located 18 at 2 Eric Circle, Verdi, Nevada (the “Property”). (Shannon Dep., ECF No. 53-4, at 8). Plaintiff 19 Wells Enterprises has owned the Property for decades. (Id.). The Property consists of certain 20 industrial buildings: buildings 1 through 4. (Id.). 21 22 On May 1, 1992, Plaintiff Wells Enterprises, as lessor, entered into a “Standard Industrial 23 Lease” (the “1992 Lease”) for the Property with Wells Manufacturing as Lessee. (1992 Lease, 24 ECF No. 54-4). Prior to the 1992 Lease, Wells Manufacturing had executed other leases for the 25 Property, including a 1987 lease addendum, which extended a prior lease through June 30, 1992. 26 27 28 (Lease Addendum, ECF No. 54-5). The 1992 Lease included terms setting forth Wells Manufacturing’s obligations relating to the condition of the Property, including provisions 1 Dockets.Justia.com 1 requiring compliance with applicable laws, accepting the Property “as-is,” keeping the Property 2 in good repair, surrendering the Property in good condition, and a prohibition against committing 3 waste and nuisance. (1992 Lease, ECF No. 54-4). 4 Defendant Carrier Corporation, a wholly-owned subsidiary of Defendant United 5 Technologies Corporation, merged with or purchased the Wells Manufacturing business (and its 6 7 leasehold interest in the Property) in 2000. In 2001, the Wells Manufacturing business became a 8 division of Defendant Carrier Commercial Refrigeration, Inc. (“CCR”), a subsidiary of Carrier 9 Corporation, called Wells Bloomfield. CCR executed a First Amendment to the 1992 Lease in 10 July 2006 that extended the lease term until June 30, 2012. (First Amendment to Lease, ECF No. 11 53-8). A Second Amendment executed the following year substituted Defendant Wells 12 13 Bloomfield, LLC as tenant and successor in interest to CCR and Wells Manufacturing, following 14 its acquisition of the assets of the Wells Bloomfield division from Defendant CCR. (Second 15 Amendment to Lease, ECF No. 53-8). Defendant Wells Bloomfield, LLC is an entity created by 16 Middleby Corporation, an unrelated company that purchased the assets of Wells Bloomfield 17 18 from CCR. (Baron Dep., ECF No. 53-5, at 35-36). 19 There have been two incidents of contamination on the Property owned by Wells 20 Enterprises, both of which pre-date the 1992 Lease and only one of which is at issue in this case. 21 In one incident, not at issue in this case, contamination led to a February 12, 1991 order from the 22 Nevada Division of Environmental Protection. (Id. at 52-53). According to the deposition of 23 24 John Baron, the February 12, 1991 order discussed employee testimony concerning Wells 25 Manufacturing employees washing the floors with solvents, with the run-off going into floor 26 drains in the south septic system area. (Id.). This practice was later identified as the source of the 27 contamination discovered in 2007, which is the contamination at issue in this case. (Id. at 53). 28 2 1 The contamination was discovered during the due diligence efforts conducted prior to the 2 sale of the assets of Wells Bloomfield to Middleby Corporation. (Id. at 19). CCR retained 3 responsibility for any environmental losses associated with the Wells Manufacturing facility in 4 Verdi. (Wells Bloomfield Asset Purchase Agreement 1.4(k), Ex. 1 to Baron Dep., ECF No. 53- 5 5). Following the discovery of contamination, the Carrier Defendants retained URS Group, Inc. 6 7 as an environmental consultant. (Baron Dep., ECF No. 53-5, at 18). The Carrier Defendants 8 secured a Phase I Environmental Site Assessment (“ESA”), which identified floor drains in the 9 south septic system area (south of Building 3) as possible sources of the contamination. (URS 10 Mem., Ex. 3 to Baron Dep., ECF No. 53-7). Any contamination of the area occurred prior to the 11 execution of the 1992 Lease; in 1991, the floor drains were capped, a toilet was removed, and the 12 13 south septic system area was covered. (Id.). 14 In June 2007, the Carrier Defendants conducted a Phase II ESA. (Id.). Based on the 15 Phase II ESA and two additional investigations, the Carrier Defendants determined that the 16 contamination was confined to the south septic system area and its leach field. (Id.). The Carrier 17 18 Defendants prepared a proposal to remediate this localized contamination and the Nevada 19 Division of Environmental Protection approved the proposal and a pilot test. (Peterson Dep. ECF 20 No. 53-9, at 17). Remediation efforts are currently ongoing. (Id.). 21 On November 24, 2010, Plaintiff Wells Enterprises filed a contamination action in the 22 Second Judicial District Court of the State of Nevada in and for the County of Washoe, Case No. 23 24 CV10-3532. Defendant Carrier Corporation was served on March 7, 2011. On April 6, 2011, 25 Defendant Carrier Corporation, with the consent and joinder of the other defendants, removed 26 the case to this Court on the basis of diversity jurisdiction. The complaint contains causes of 27 action for (1) waste; (2) nuisance; (3) trespass; (4) breach of contract; (5) anticipatory breach of 28 3 1 contract; and (6) injunctive relief. Plaintiff has requested actual damages and treble damages 2 under Nev. Rev. Stat. § 40.150, attorney’s fees, costs, and interest. Plaintiff has also requested a 3 permanent injunction mandating that the Defendants continue their investigation and remediation 4 efforts and restore the Property to a clean condition, by removing the contaminants and/or 5 pollution. 6 7 In July 2012, Defendants moved for partial summary judgment on Plaintiff’s damages 8 claims. (Mot. Partial Summ. J., ECF No. 53). Defendants’ argued that because the temporary 9 harm to Plaintiff’s property allegedly caused by discovery of the contamination was being 10 addressed through ongoing remediation, any recovery of damages (i.e., property restoration 11 costs) for that temporary harm would amount to an impermissible double recovery. (Id. at 3, 6, 712 13 8). Defendants also argued that Plaintiff had not alleged permanent harm to the value of its 14 property and, even if it had, Plaintiff had no evidence demonstrating the fact of a permanent drop 15 in the value of its property or the amount of any such drop. (Id. at 3, 6, 8-10). 16 Plaintiffs August 2012 response focused on the nature of the alleged contamination and 17 18 improperly attempted to shift the burden of proof to Defendants. (See Opp’n to Mot. Partial 19 Summ. J., ECF No. 57, at 7). Plaintiff did not argue that it experienced any form of compensable 20 temporary damage, nor did it identify any evidence to support such a claim. (Id.). Moreover, 21 while Plaintiff claimed that a question of fact remained as to whether the “harm to the property” 22 was temporary or permanent, its response did not identify any record evidence from which a 23 24 fact-finder could determine the fact or amount of any claimed permanent drop in value 25 attributable to the contamination. (See generally id.). While Plaintiff’s damages expert offered 26 an opinion that, as of November 2007, the value of its property was zero, the expert refused to 27 opine that this drop from a claimed pre-November 2007 value of about $4 million was 28 4 1 permanent, or that it even continued to the present date. Instead, the expert claimed that further 2 investigation was necessary to determine the present market value of the property. (Kilpatrick 3 Dep., ECF No. 64-1, at 47-50, 71-72). 4 On March 19, 2013, this Court granted partial summary judgment in favor of defendants 5 on Plaintiff’s claim for damages. (Order, ECF No. 68, at 5-8). In its Order, the Court explained 6 7 that while Plaintiff “chooses to make summary declarations that damages must be permanent 8 because remediation activity is ongoing and uncertain,” it is “Plaintiff’s burden to show that 9 there was in fact a permanent injury, and to provide evidence of the amount of damages.” The 10 Court then found Plaintiff’s damages evidence was “clearly deficient,” because “it [did] not take 11 into account any subsequent remediation efforts while acknowledging that such efforts are being 12 13 undertaken at no cost to Plaintiff and may in fact prove to be successful.” (Id.). The Court then 14 concluded that because Plaintiff’s “only evidence of damages [was] a valuation of the land at 15 zero dollars as of November 2007,” Plaintiff had “failed to carry its burden to prove the fact and 16 amount of damages.” (Id. at 7). Further, although the Court acknowledged that “temporary 17 18 19 damages may also be awarded while remediation is ongoing,” it found that Plaintiff had failed to present any evidence to show the amount of any temporary damages. (Id. at 8). 20 Plaintiff asked the Court to reconsider, and the Court denied the motion. Plaintiff has 21 now asked the Court to enter a partial judgment against it and certify the partial judgment for 22 immediate appeal under Rule 54(b). 23 24 25 26 II. LEGAL STANDARDS “When an action presents more than one claim for relief—whether as a claim, counterclaim, crossclaim, or third-party claim—or when multiple parties are involved, the court 27 28 5 1 may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only 2 if the court expressly determines that there is no just reason for delay.” Fed. R. Civ. P. 54(b). 3 III. 4 ANALYSIS The Court has not yet entered judgment on any claims, nor would it be appropriate for the 5 Court to do so. Plaintiff argues that the Court foreclosed the possibility of monetary damages on 6 7 any claim, and that therefore only the sixth claim for injunctive relief remains, and that the Court 8 has in fact finally ruled as to the first through fifth claims. That is not quite correct. The 9 injunctive relief claim is no claim at all but a measure of relief potentially available under the 10 first five claims. In truth then, no claims have been finally adjudicated such that the Court could 11 enter judgment on them. Rather, all claims remain pending for trial, but the only measure of 12 13 relief available appears to be injunctive relief. CONCLUSION 14 15 IT IS HEREBY ORDERED that the Motion to Certify Judgment as Final (ECF No. 76) is 16 DENIED. 17 18 19 IT IS SO ORDERED. Dated this 17th day March, 2014. Dated this 28th day of of April, 2014. 20 21 22 _____________________________________ ROBERT C. JONES United States District Judge 23 24 25 26 27 28 6