In KB, The Indiana Court of Appeals reversed the lower court’s ruling and allowed a home builder’s negligence claim against a former manufacturer who had contaminated the off-site groundwater.  The court explained its reversal on the negligence claim and further explored why the home builder did not have trespass or nuisance claims against the polluter.

KB, the adjacent property owner and home builder, sought damages for Rockville’s contamination of the groundwater at KB’s property.  Rockville and predecessors contaminated the groundwater with TCE, a common and toxic solvent, released during operations from 1969 through 1993.  Rockville stopped using the TCE and removed the product from its property in 1993.  At about the same time, environmental investigations revealed the TCE contamination at Rockville’s property, and by 1997, evidence showed that contamination had migrated “through all of” the off-site, adjacent property later purchased by KB. 

In 1999, KB purchased lots at the adjacent property for residential development.  KB did not perform any environmental due diligence; however, the seller of the off-site property executed affidavits indicating that the property was not contaminated. Investigations a few years later further confirmed that TCE had migrated off-site in the groundwater from Rockville’s property and flowed under KB’s lots, but the seller did not disclose that information to KB.  It wasn’t until 2005, when KB performed its own investigation that it learned of the TCE contamination at its property. 

Trespass requires a showing that 1) plaintiff owned the land at the time of the trespass and 2) the entry onto land was illegal. The Court of Appeals agreed that the trespassing activity ended well before KB owned the adjacent property.  TCE was used or released at Rockville’s property before 1993, had spread under all of the adjacent property by 1997, and KB did not have ownership of the adjacent property until 1999.   The court explained that KB simply did not own the land at the time of the contaminant migration, and therefore, KB did not have a trespass claim.

The nuisance claim also failed based on the timing and characterization of the polluting activity.  The Court of Appeals denied KB’s nuisance claim on grounds different than those relied upon by the lower court.  The lower court dismissed the nuisance claim under the reasoning that damages to KB’s property were not “foreseeable as a matter of law.”   The appellate court disagreed outright and held that “it is undisputable that the environmental damage to KB’s property is precisely the type of harm that a reasonable person would foresee from Rockville’s release of dangerous pollutants.” 

Instead, the Court of Appeals focused on the remedy, which is to “abate or enjoin the nuisance” where a nuisance claim is “designed to cease or lessen the defendant’s continued offensive behavior.”  The question then becomes, what is the nuisance causing behavior when the manufacturer is long gone and no longer owns or operates the property?  In Gray v. Westinghouse, 624 N.E.2d 49 (Ind. Ct. App. 1994), where capacitors in a dump caused PCB contamination in groundwater, the court held that the polluting party may be held liable for nuisance even if it does not own or operate the property where “the nuisance originates.”  However, the court noted that Gray did not discuss the facts that 1) the contamination was caused before plaintiff occupied the adjacent land and 2) the dumping activity had stopped years before plaintiff filed his claim.  

In KB, the court determined that “Rockville’s release of chemicals to the ground caused the harm,” and “Rockville’s contamination of the property ceased in 1993.”   In the words of Chief Judge Baker, “under these circumstances, KB has failed to show that a nuisance existed or was ongoing that could be abated or enjoined.  Put another way, the damage has already been done, and KB’s cause of action against Rockville sounds in negligence.”  It is not clear if the court considered the fact that the plume had migrated through the KB property by 1997, as it did in the trespass claim or if it is limiting the offending behavior in the nuisance claim to Rockville’s on-site releases of TCE to the ground.

With the polluting activity over and the environmental damage done, KB is still left with its negligenceclaim.  KB claimed that Rockville’s negligent conduct caused the contamination and that Rockville was negligent in failing to stop the contamination from migrating.  The Court of Appeals reversed the trial court’s finding that the economic loss doctrine precludes KB from pursuing its negligence claim.  KB did not have any contract with Rockville and did not assert any product liability type claim, so the economic loss doctrine could not bar the negligence action.  The court remanded the negligence cause of action for trial.

KB and Gray, create some uncertainty with environmental trespass and nuisance claims against a polluter who is no longer spilling, dumping or using the contaminant at the property where the nuisance originated.   The cases show that understanding technical evidence involving the pollution migration and the nature of the polluting activity are critical in evaluating how a court may consider the timing of the trespass and the duration of the nuisance causing behavior.

Author: Jamie B. Dameron (bio)
Phone: 317.822.6787
Email: jdameron@bamberger.com