Dunellen, et al. v. Power Test Realty, et al. CV-09-211-JL 1/11/13 UNITED STATES DISTRICT COURT DISTRICT OF RHODE ISLAND

Dunellen, LLC and Capital Terminal Company

v. Civil No. 09-CV-211-JNL Opinion No.

Power Test Realty Company Limited Partnership and Getty Properties Corp.

v.

Getty Petroleum Marketing, Inc.

MEMORANDUM ORDER

This case presents the question of who is responsible for

groundwater contamination at a petroleum storage facility in East

Providence, Rhode Island. Plaintiffs Dunellen LLC and Capital

Terminal Company, which, respectively, own and operate the

facility, originally sued defendants Power Test Realty Company

Limited Partnership and Getty Properties Corp., which own nearby

parcels and the pipelines installed on them. The plaintiffs

allege that these premises are the source of the contamination

and that the defendants have failed to take any action to

remediate it following its discovery.

The defendants responded, in part, by bringing a third-party

complaint against Getty Petroleum Marketing, Inc., which operated

two of the defendants' pipelines between 1997 and 2003 pursuant

to a written lease with Getty Properties. The defendants assert that Getty Marketing must indemnify them against the plaintiffs'

claims under the provisions of the lease or, in the alternative,

theories of eguitable indemnification and contribution. After

the defendants filed their third-party complaint, the plaintiffs

amended their complaint to bring all of the same claims they

originally brought against the defendants (save a claim for

contractual indemnification) against Getty Marketing as well.

This court has jurisdiction over all of the plaintiffs'

claims under

(a)(1) (diversity) because

(1) Capital Terminal, Dunellen's sole member, is a Rhode Island

corporation with its principal place of business there, (2) Getty

Properties, Power Test's general partner,1 is a Delaware

corporation with its principal place of business in New York, and

Power Test's only other partner is a Maryland corporation with

its principal place of business in New York, and (3) Getty

Marketing is a Maryland corporation with its principal place of

business in New York. Though the defendants are not diverse from

Getty Marketing, this court can exercise supplemental

jurisdiction over their claims against Getty Marketing in the

third-party complaint. See

§ 1367(a).

1Because, by virtue of this relationship, Getty Properties is liable for Power Test's obligations, see

(a), this order generally does not distinguish between Power Test and Getty Properties, referring to them collectively as "defendants."

2 Getty Marketing has since filed separate motions for summary

judgment, see Fed. R. Civ. P. 56, as to both the defendants'

claims against it in the third-party complaint, and the

plaintiffs' claims against it in the amended complaint. As Getty

Marketing points out, there is no dispute that it did not cause

the contamination on the premises, and, in fact, that the

contamination pre-existed Getty Marketing's tenancy. Getty

Marketing argues that, as a conseguence, it has no duty to

remediate the contamination, and has moved for summary judgment

on the plaintiffs' claims seeking to hold it liable for failing

to do so. Indeed, in adjudicating an enforcement action against

both Getty Marketing and the defendants, a hearing officer at the

Rhode Island Department of Environmental Management found that

the responsibility for remediating this pre-existing

contamination fell to Power Test, as the property owner, rather

than to Getty Marketing, as the tenant.

In moving for summary judgment on the defendants' third-

party claims, Getty Marketing argues that this finding

collaterally estops the defendants from obtaining indemnification

or contribution from it against the plaintiffs' claims, whether

under the parties' lease or theories of eguitable indemnification

or statutory contribution. Getty Marketing further argues that,

regardless of the preclusive effect of the hearing officer's

finding, the lease does not entitle the defendants to

3 indemnification for pre-existing violations of environmental law

on the premises, such as the contamination at issue here. The

defendants, for their part, have cross-moved for summary judgment

on their claim for indemnification under the lease.

As explained fully infra, the court agrees with Getty

Marketing that, in light of the hearing officer's findings that

Power Test--and not Getty Marketing--is responsible for failing

to abate the contamination on the leased premises, the defendants

are collaterally estopped from seeking to shift that

responsibility to Getty Marketing through their third-party

claims for indemnification and contribution. The court further

agrees that, regardless of these findings, the parties' lease

does not entitle the defendants to indemnification from Getty

Marketing against the plaintiffs' claims, because they arise out

of pre-existing environmental violations on the premises.

Finally, the court declines to recognize the plaintiffs' theory

that, simply because the contamination was discovered during

Getty Marketing's tenancy over the premises, it is liable to the

plaintiffs for failing to remediate it, even though the

contamination pre-dated the tenancy and Getty Marketing never

controlled any instrumentality that caused it. Accordingly,

Getty Marketing is entitled to summary judgment on both the

plaintiffs' claims and the defendants' third-party claims.

4 I. Applicable legal standard

Summary judgment is appropriate where "the movant shows that

there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law." Fed. R. Civ.

P. 56(a). A dispute is "genuine" if it could reasonably be

resolved in either party's favor at trial, and "material" if it

could sway the outcome under applicable law. See Estrada v.

Rhode Island,

(1st Cir. 2010) . In analyzing a

summary judgment motion, the court "views all facts and draws all

reasonable inferences in the light most favorable to the

non-moving" parties.

On cross-motions for summary judgment,

"the court must consider each motion separately, drawing

inferences against each movant in turn." Merchants Ins. Co. of

N.H., Inc. v. U.S. Fid. & Guar. Co.,

(1st Cir.

1998) (guotation marks omitted).

II. Background

A. Historical facts

The facts material to the summary judgment motions are

largely undisputed.2 In 2002, engineers working for the

2Indeed, the defendants do not dispute any of the facts set forth in Getty Marketing's statement of undisputed facts, see D.R.I. L.R. Civ. 56(a)(1), and did not file a statement of disputed facts, with the result that the facts stated by Getty Marketing are deemed admitted, L.R. Civ. 56(a) (3), at least by the defendants. While the plaintiffs filed a statement of disputed facts, it neither denies or otherwise contravenes the

5 plaintiffs discovered light non-aqueous phase liquid ("LNAPL") in

a groundwater monitoring well located on Dunellen Road, a city

street running between one of the plaintiffs' parcels (known as

"Parcel 15" on an assessor's plat map) and another property

("Parcel 11" on the same map) in the area. Defendant Power Test

has owned Parcel 11, as well as another nearby property known as

"Parcel 9" on the assessor's map, since 1985, when it acquired

them from Texaco Refining and Marketing, Inc.

At the time LNAPL was discovered in the monitoring well,

Getty Marketing was operating two pipelines running across

Parcels 9 and 11 to a bulk storage tank holding fresh unleaded

gasoline. Two other pipelines traversing those parcels were

capped off and filled with slurry in 1975, and have not been

operated since then. Getty Properties (or its predecessor-in-

interest) has owned the pipelines on Parcels 9 and 11 since 1985.

vast majority of the facts set forth in Getty Marketing's statement of undisputed facts, but states, " [d]iscovery is ongoing and therefore Plaintiffs are unable to respond." The local rules do not contemplate that sort of "non-response," see

and, while the Federal Rules of Civil Procedure authorize relief to a party responding to a summary judgment motion who "cannot present facts essential to justify its opposition," that relief requires that non-movant to show why "by affidavit or declaration" and "for specified reasons." Fed. R. Civ. P. 56(d). The plaintiffs have not attempted to do so. Instead, they have filed an opposition to Getty Marketing's motion for summary judgment, waiving their right to relief under Rule 56(d). See Kiman v. N.H. Dep't of Corr.,

, 282 n.7 (1st Cir. 2006). Accordingly, the court has treated as undisputed any fact in Getty Marketing's factual statement as to which the plaintiffs have claimed an inability to respond. See L.R. Civ. 56(a)(3).

6 In February 1997, Getty Properties began leasing Parcels 9 and

11, and the pipelines, to Getty Marketing under a written "Master

Lease" agreement that was subseguently amended and restated in

November 2000, as well as an integrated "Environmental

Agreement." Both the Master Lease and the Environmental

Agreement provide that New York law governs their interpretation.

Getty Marketing used the two active pipelines on Parcels 9 and 11

from March 1997 until April 2003. Both Getty Properties and

Getty Marketing used the pipelines to transport unleaded refined

gasoline, home heating oil, and diesel fuel only.

Following the 2002 discovery of LNAPL in the monitoring

well, Getty Marketing suspended use of the pipelines. It then

excavated all of the active pipelines on Parcel 11 to check for

leaks, but found no evidence of any. After those pipelines

passed pressure testing, the Rhode Island Department of

Environmental Management ("DEM") granted Getty Marketing approval

to resume their operation. Testing of samples from the

monitoring well, moreover, indicated the presence of a "JP-4 type

aviation fluid," naptha, "weathered, leaded automotive gasoline,"

or "natural gasoline," which is "distinctively different from

automotive gasoline." All of these substances, in fact, are

different from the undegraded automotive gasoline held in the

bulk storage tank connected to the pipelines in 2002.

7 B. DEM proceedings

Acting pursuant to Rhode Island's Oil Pollution Control Act,

see R.I. Gen. Laws § 46-12-5.1-2, DEM issued Getty Properties a

letter of responsibility, see

,

noting the presence of LNAPL in an abutting property's

groundwater. DEM then issued a notice of intent to enforce, see

(a), against both of the defendants here,

as well as Getty Marketing, in July 2003. Following a site

investigation and additional testing, DEM issued a notice of

violation, order, and penalty, see

§ 3:7 (b), against both of

the defendants, as well as Getty Marketing, in July 2005.

All of these parties contested this action in an

adjudicatory hearing. See R.I. Gen. Laws § 42-17.6-4(a) . In

connection with the hearing, each party was permitted to submit

testimony from its designated witnesses, as well as exhibits, and

to cross-examine the other parties' witnesses. Id. § 42-17.7-5.

The parties stipulated to a number of facts, including all of

those just set forth. The hearing took place over two days in

May 2008. In a lengthy written order that followed, the hearing

officer adopted the parties' stipulated facts, and also made

additional findings. In re Getty Marketing Mktg., Inc., No. 05-

001 (R.I. Dep't Environ. Mgmt. Dec. 23, 2009).

These findings included that:

8 (1) "[t]here is no evidence that there has been a discharge or release of petroleum product from the active pipelines on the site operated by [Getty Marketing] between March 21, 1997 and April, 2003 and operated by [Getty Properties] and its predecessors in interest between February 1, 1985 and March 21, 1997";

(2) the defendants and Getty Marketing "did not cause the petroleum product to be initially released onto the subject premises"; and

(3) while "[t]he petroleum product is leaching through the deep aguifer in and below the property owned by [Power Test]," Getty Properties and Getty Marketing "are not responsible for the continuing discharge."

Id. at 26 (capitalization omitted). Based on these findings, the

hearing officer dismissed the notice of violation in itsentirety

against both Getty Properties and Getty Marketing, and in part

against Power Test. Id. at 36. The hearing officer ruled that

it had not been proven, by a preponderance of the evidence, that

any party violated the Water Pollution Control Act or the

associated regulations, or that either Getty Properties or Getty

Marketing had violated the Oil Pollution Control Act or the

associated regulations. Id. at 35.

The hearing officer sustained the notice of violation

against Power Test in part, ruling that its alleged violation of

the Oil Pollution Control Act and associated regulations had been

proven by a preponderance of the evidence. Id. Specifically,

the hearing officer found that, since the discovery of the

"leaching of petroleum onto and throughout the deep aguifer"

below its property. Power Test had not taken any action to

9 mitigate or remediate the resulting contamination, in violation

of the Oil Pollution Control Act, R.I. Gen. Laws § 46-12.5.1-3,

and its implementing regulations, 25 R.I. Code R. §§ 2:6, 12, at

34-3. Id. at 33-35. The hearing officer ruled that, under the

Act, "liability can be imputed to a property owner for passive

conduct for failure to remove contaminants from the groundwater

under its property once discovered. This liability is not

excused by the fact that the petroleum was released by a prior

owner." Id. at 26. As the hearing officer concluded:

Liability for the failure to remove contaminants from the groundwater rests with the property owner. In the pending case the property owner, [Power Test], is determined to be responsible for the violation of [the Oil Pollution Control Act] . . . . [Getty Marketing], the operator of two pipelines that are installed in Parcels 9 and 11 is not found to be liable for the violation.

Id. at 27 (parenthetical omitted).

Power Test appealed the hearing officer's decision to the

Superior Court, but its appeal challenges only its own

responsibility for the discharge, rather than the hearing

officer's rulings that Getty Marketing is not responsible.

Neither of the plaintiffs here was a party to any of the DEM

proceedings at any stage.

C. Procedural history

After the hearing, but before the decision issued, the

plaintiffs commenced this action against the defendants in

10 Providence County Superior Court. The complaint alleged that the

LNAPL on the defendants' property had caused "significant

contamination" to the plaintiffs' property and that, following

the discovery of the LNAPL in 2002, the defendants had failed to

take any action to remediate or remove it. Noting that the

defendants were the owners of land and pipelines "from which

there has been, and continues to be, a release of LNAPL"

contaminating the plaintiffs' property, the complaint brought

claims of nuisance, negligence, trespass, violation of the Rhode

Island Water Pollution Control Act, R.I. Gen. Laws § 46-12-1 et

seg., and indemnification pursuant to a written agreement between

Dunellen's and Getty Properties' predecessors-in-interest. In

response, the defendants demanded that Getty Marketing defend the

plaintiffs' lawsuit on the defendants' behalf, but Getty

Marketing refused. The defendants also removed the action to

this court. See

.

The defendants then brought a third-party complaint against

Getty Marketing, seeking indemnification from the plaintiffs'

claims under the Master Lease or, in the alternative, theories of

eguitable indemnification and statutory contribution. In support

of these theories, the defendants assert that Getty Marketing

"has had exclusive control of the parcels 9 and 11 and the

pipelines since 1997 as the tenant in possession," giving it

"some or all of the liability" for the plaintiffs' claims that

11 release from the parcels and pipelines "are an ongoing source of

contamination." In support of the defendants' contractual

indemnification claim, they assert that Getty Marketing "is

responsible under the Master Lease for compliance with all laws

affecting parcels 9 and 11 and the pipelines, and for all costs,

fees, damages, or penalties arising out of or related to alleged

LNAPL contamination of parcels 9 and 11."

Getty Marketing promptly moved for summary judgment on all

of the defendants' third-party claims. Before the defendants

responded, the plaintiffs filed a second amended complaint

bringing all of the same claims they originally brought against

the defendants (except the contractual indemnification claim)

against Getty Marketing as well. When the defendants filed their

opposition to Getty Marketing's motion for summary judgment on

the third-party claims, they argued, among other things, that

summary judgment would be "premature" in light of the plaintiffs'

recent claims against Getty Marketing. See infra note 6. (The

plaintiffs, for their part, filed a response to Getty Marketing's

motion for summary judgment making a similar argument.) The

defendants also cross-moved for summary judgment on their claim

for contractual indemnification.

In reply to both the defendants and the plaintiffs, Getty

Marketing argued, among other things, that the pendency of the

plaintiffs' new claims against Getty Marketing had no effect on

12 the defendants' third-party claims against Getty Marketing

because the plaintiffs' claims failed as a matter of law. Getty

Marketing simultaneously filed a motion for summary judgment on

the plaintiffs' claims that incorporated this argument (so that,

in essence, Getty Marketing's reply memoranda on its motion for

summary judgment on the defendants' claims served as its opening

memorandum on its motion for summary judgment on the plaintiffs'

claims). The plaintiffs filed an opposition to this motion, and

Getty Marketing filed a reply. The case was subseguently

reassigned to the undersigned.

Ill. Analysis

A. Summary judgment on the third-party claims

In moving for summary judgment on the defendants' third-

party claims, Getty Marketing argues that they are barred by the

collateral estoppel effect of the hearing officer's findings

that, while Getty Marketing did not cause the release, and is not

responsible for the discharge, of petroleum product into the

aguifer. Power Test i_s responsible for that discharge. Getty

Marketing maintains that, as a result, the defendants cannot show

that (1) Getty Marketing caused any injury to the plaintiffs,

which is an essential element of the eguitable indemnification

and contribution claims, (2) the defendants are blameless for the

plaintiffs' injury, which is an essential element of the

13 equitable indemnification claim, and (3) the plaintiffs failed to

comply with environmental laws, which is an essential element of

Getty Properties' claim for indemnification under the Master

Lease. Getty Marketing further argues that the defendants'

contractual indemnification claim fails as a matter of law in any

event because the Master Lease imposes no liability on Getty

Marketing "for contamination that it did not cause and which

arose prior to the commencement date of the lease." In cross-

moving for summary judgment on that claim, the defendants argue

that the Master Lease unambiguously requires Getty Marketing to

indemnify Getty Properties against the plaintiffs' claims so

that, by refusing to do so, Getty Marketing has indisputably

breached the agreement.

As explained fully below, the court agrees with Getty

Marketing, both as to the collateral estoppel effect of the

hearing officer's findings and the interpretation of the Master

Lease and Environmental Agreement. First, the hearing officer's

findings that Getty Marketing is not liable for failing to

remediate the contamination on parcels 9 and ll--but that Power

Test is--collaterally estop the defendants from obtaining

indemnification (or contribution from) Getty Marketing against

the plaintiffs' claims against the defendants, which arise out of

that very same failure to remediate. Second, and independently,

the Environmental Agreement expressly relieves Getty Marketing of

14 any responsibility to remediate any condition on the property

that was non-compliant with environmental laws as of the

effective date of the restated Master Lease--and the defendants

do not question that the LNAPL contamination on parcels 9 and 11

is just such a condition.

1. Indemnification under the Master Lease

a. Section 9.2

In sparring over the scope of Getty Marketing's

indemnification liability under the Master Lease, the parties

focus largely, though not exclusively, on section 9.2. That

section, under the heading "Environmental Matters," states:

Tenant Obligations . . . . Tenant shall, except as provided in Section 25.3, be solely responsible, at its own cost and expense, for compliance with all Environmental Laws applicable to the Premises after the Commencement Date of the 1997 Master Lease.

The Commencement Date of the 1997 Master Lease is February 1,

1997. The Master Lease defines "Environmental Law" to include,

among other things, "all laws, ordinances, requirements, orders,

directives, rules, regulations, and applicable judicial and

administrative decisions . . . affecting the . . . use,

maintenance, operation or occupancy of . . . any part of any

Property," including "Laws related to the release or discharge of

Hazardous Substances to . . . groundwater . . . in, on, at, to or

from . . . any Property, or any part of any Property."

15 As an initial matter, while the defendants rely heavily on

section 9.2 in support of their contractual indemnification

claim, they also advance a construction of the Master Lease that

seems to undermine that support. As the defendants recognize,

while section 9.2 makes Getty Marketing solely responsible for

complying with all environmental laws applicable to the property

following the onset of the lease, that responsibility is subject

to the exception provided in section 25.3. Under that section,

which is entitled "Violation of Environmental Law,"

In the event that any violation of Environmental Law exists with respect to any property as of [December 8, 2000]3 whether or not any party shall have received notice or otherwise become aware of such violation (such violation being referred to herein as a "Preexisting Environmental Violation") the following provisions shall apply. The mere existence of any such Preexisting Environmental Violation shall not cause Tenant to be in default under this Restated Lease. Landlord's and Tenant's obligations shall be set forth elsewhere in this Restated Lease and in the Environmental Agreement.

3Section 25.3 states this date as the "Restatement Effective Date," which is defined as "the initial acceptance for payment of shares of Company Common Stock pursuant to the Offer" (parentheticals omitted). These terms are references to the merger agreement between, among other parties, Getty Marketing and Lukoil (the Russian oil concern). While the parties have not provided the merger agreement to the court, Getty Marketing's filings with the Securities and Exchange Commission indicate that Lukoil accepted Getty Marketing's tender of shares on or about December 8, 2000. In guoting various sections of the Master Lease in this order, then, the court has therefore substituted this date in for the term "Restatement Effective Date."

16 Thus, as the defendants acknowledge, Getty Marketing cannot

"be declared in default due to a pre-existing violation of

environmental laws" at the property, which are dealt with not by

section 9.2, but "by other provisions in the Master Lease and

Environmental Agreement." The defendants also do not guestion

that the presence of LNAPL on parcels 9 and 11 is a "Preexisting

Environmental Violation": to the contrary, they state that

"[t]he LNAPL apparently originates from an ancient discharge or

discharges . . . long before [Getty Properties, Power Test, or

Getty Marketing] owned or operated the Property."

The defendants do not explain how, in light of their

explicit or tacit agreement that, first, section 9.2 does not

impose any liability on Getty Marketing for pre-existing

environmental violations, and, second, that the presence of LNAPL

on the property is a pre-existing environmental violation, the

defendants are nevertheless entitled to indemnification from

Getty Marketing under section 9.2 for remediating the LNAPL

contamination on the property. The lack of such an explanation

would seem fatal to the defendants' contractual indemnification

claim insofar as it is based on section 9.2 of the Master Lease,

even putting aside Getty Marketing's argument that the defendants

are collaterally estopped from bringing such a claim.

In any event, that argument is correct, even assuming,

dubitante, that Getty Marketing's failure to remediate the LNAPL

17 contamination at the property could entitle the defendants to

indemnification under section 9.2 (on the theory that this is a

violation of environmental law under that provision, but not a

pre-existing environmental violation under section 25.3). To

hold Getty Marketing responsible for the plaintiffs' claims

against the defendants, the defendants would have to show that

those claims arise out of Getty Petroleum's failure to comply

with environmental law applicable to the property after February

1, 1997. But the defendants cannot make that showing, on account

of the hearing officer's findings that Getty Marketing did not

cause the initial discharge, and is "not responsible for the

continuing discharge," of LNAPL from parcels 9 and 11 (since

those discharges are the only violations of environmental law

alleged by the defendants).

"Under federal law, a state court judgment receives the same

preclusive effect as it would receive under the law of the state

in which it was rendered." Dillon v. Select Portfolio Servicing,

(1st Cir. 2011). Rhode Island law provides that,

"[e]xcept where application of the doctrine would produce

ineguitable results, collateral estoppel operates to bar the

relitigation of an issue when: (1) the party against whom

collateral estoppel is sought is the same or in privity with the

party in the previous proceeding; (2) the previous proceeding

resulted in a final judgment on the merits; and (3) there is an

18 identity of issues." Cronan v. Iwon,

(R.I.

2009). Under Rhode Island's collateral estoppel doctrine, then,

"an issue of ultimate fact that has been actually litigated and

determined cannot be re-litigated between the same parties or

their privies in future proceedings." Foster-Glocester Reg' 1

Sch. Comm, v. Bd. of Review,

(R.I. 2004)

(guotation marks omitted).

The defendants do not contest that they were parties to the

DEM proceedings before the hearing officer. Nor do they contest

that those proceedings, in which each party was permitted to

submit testimony from its own witnesses and cross-examine the

other's, concluded with a final judgment on the merits entitled

to preclusive effect.4 See Dep't of Corr. v. Tucker,

(R.I. 1995) ("an adjudicative determination will be

conclusive as long as the administrative tribunal grants to the

parties substantially the same rights as they would have if the

matter were presented to a court") (citing Restatement (Second)

of Judgments § 83 (1982)). Instead, the defendants argue that

there is no identity of issues between this action and the DEM

proceedings, because the parties to those proceedings "never

4While, as noted supra, the defendants have appealed the hearing officer's decision to the Superior Court, they have not appealed his findings that Getty Marketing is not responsible for the continuing discharge and, in any event, "[a] judgment may be given res judicata effect even though that judgment is subject to an appeal." Silva v. Silva,

(R.I. 1979) .

19 litigated the question of which of them, if any, is responsible

for damages allegedly caused by leaching of LNAPL-contaminated

groundwater onto [the plaintiffs'] property."

As the defendants acknowledge in a footnote to their summary

judgment memorandum, however, the hearing officer specifically

found that Getty Marketing "did not cause the petroleum product

to be initially released onto" parcels 9 and 11 and is "not

responsible for the continuing discharge" of petroleum product

into the aquifier below the property. In re Getty Marketing

Mktg., Inc., slip op. at 26. The hearing officer also

specifically found that "[1]lability for the failure to remove

contaminants from the groundwater rests with the property owner,"

Power Test, rather than with "the operator of two pipelines that

are installed" at the property, Getty Marketing. Id. at 27.

In a single sentence in the same footnote, the defendants

state that these conclusions are solely "based on the statutes

relied upon by" the hearing officer, who therefore did not

determine "whether [Getty Properties] caused a continuing

discharge for purposes of a negligence, trespass, nuisance or

other common law claim by an abutter such as" the plaintiffs. A

party cannot avoid summary judgment through this sort of

inadequately developed argument. See Higgins v. New Balance

Athletic Shoe, Inc.,

(1st Cir. 1999) . In any

20 event, as best as this court can understand the defendants'

point, it is without merit.

Again, the hearing officer found that "[1]lability for the

failure to remove contaminants from the groundwater rests with"

Power Test and not with Getty Properties, even though neither of

them caused the contamination. The fact that the hearing officer

came to this conclusion in deciding statutory claims against

Getty Properties for its alleged failure to decontaminate the

groundwater does not diminish the preclusive effect of that

finding in this action simply because it includes common-law

claims against Getty Properties for the same thing. "The

doctrine of collateral estoppel makes conclusive in a later

action on a different claim the determination of issues that were

actually litigated in the first action." E.W. Audet & Sons, Inc.

v. Fireman's Fund Ins. Co. of Newark, N.J.,

(R.I. 1994) (emphasis added). The defendants do not dispute that

Getty Marketing's liability for the continuing discharge of

petroleum into the groundwater beneath parcels 9 and 11 was

actually litigated before, and determined by, the hearing

officer, who found that Getty Marketing was not liable. The

defendants cannot avoid the preclusive effect of that finding by

relying on different claims or theories of liability against

Getty Marketing. Again, because collateral estoppel bars the

relitigation of "issues that actually were decided in the prior

21 lawsuit, it may even apply when the second lawsuit asserts a

different claim." Plunkett v. Rhode Island,

(R.I. 2005) (emphases added).5

Pointing out that the hearing officer's findings do not bind

the plaintiffs, who were not parties to the DEM proceedings, the

defendants say that if the plaintiffs "were to succeed in proving

a release from the active pipelines [on parcels 9 and 11] after

1997, when [Getty Marketing] took control of them, it would be a

material change of circumstances and collateral estoppel would

not bar [the defendants] from suing [Getty Marketing] for

contribution and indemnification." Of course, the hearing

officer specifically found that no such release had occurred.

In re Getty Marketing Mktg., Inc., slip op. at 26, and, for the

reasons just discussed, that finding collaterally estops the

defendants, who were parties to the DEM proceedings, from arguing

otherwise. While the defendants cite a case where the court of

appeals "acknowledged that changed circumstances may defeat

collateral estoppel," that case actually rejected a "changed

circumstances" argument, Ramallo Bros. Printing, Inc. v. El Dia,

Inc.,

(1st Cir. 2007), and the defendants

offer nothing else to support such an argument here. Like their

5This principle also disposes of the defendants' suggestion that the hearing officer's findings are not entitled to preclusive effect here because the parties there "did not file any cross claims" against each other.

22 other argument against giving collateral estoppel to the hearing

officer's findings, then, their "changed circumstances" argument

is insufficiently developed and therefore safely ignored. See

Higgins,

.

Even putting that aside, though, the plaintiffs have

essentially disclaimed any theory that an LNAPL release occurred

during Getty Marketing's control of the pipelines: in their

response to Getty Marketing's motion for summary judgment on the

plaintiffs' claims, they say that "for the purposes of [those

claims], whether or not [Getty Marketing] caused the initial

release of LNAPL is irrelevant." So, even if "changed

circumstances" included the possibility that a non-party to the

prior proceeding might prevail on a claim that the parties to

that proceeding are estopped from relitigating--and, again, the

defendants have provided nothing to support that notion as a

matter of law--there is no realistic possibility of that here, at

least as regards a claim that LNAPL was discharged from the

pipelines during Getty Marketing's tenancy, because the

plaintiffs do not appear to be pressing that claim.6

6In a similar vein, the defendants argue that deciding their third-party claims against Getty Marketing before deciding the plaintiffs' claims against Getty Marketing would be "premature" in that it would expose the defendants to "the possibility of inconsistent results: being held liable to [the plaintiffs] after [Getty Marketing] has been granted judgment on the third- party claims." The court sees nothing "inconsistent" in a scenario where a defendant is held liable to a plaintiff but

23 Accordingly, the hearing officer's findings that Getty

Marketing did not cause the initial discharge, and is not

responsible or liable for the continuing discharge, of LNAPL on

parcels 9 and 11 bar the defendants from relitigating Getty

Marketing's liability for failing to remediate the continuing

discharge in this action. Aside from that alleged failure--the

very omission for which the hearing officer specifically found

Getty Marketing not liable--the defendants do not claim that

Getty Marketing has, through action or inaction, violated any

"Environmental Laws applicable to the Premises after the

Commencement Date" so as to breach section 9.2 of the Master

Lease. It follows that the defendants are collaterally estopped

from using Getty Marketing's alleged breach of section 9.2 as the

basis of their claim for indemnification under the Master Lease.

b. Other sections of the Master Lease

The defendants suggest that they are entitled to

indemnification from Getty Marketing under other provisions of

the Master Lease. As Getty Marketing points out, however, the

defendants merely guote various sections of those documents,

highlighting certain phrases, without explaining how these

cannot get indemnification against that liability from a third party. In any event, through this order, the court is in fact simultaneously granting summary judgment to Getty Marketing on both the defendants' third-party claims and the plaintiffs' direct claims, avoiding any possible "inconsistency."

24 provisions require Getty Marketing to indemnify Getty Properties

against the plaintiffs' claims against the defendants (which, as

just noted, arise solely out of the failure to remediate the

continuing discharge of petroleum into the groundwater beneath

the property). This is problematic, because "[a] party who

aspires to oppose a summary judgment motion must spell out his

arguments squarely and distinctly." Higgins,

.

In any event, the court cannot see how any of these provisions

supports the defendants' contractual indemnification claim.

The defendants cite certain provisions of section 10 of the

Master Lease, entitled "Indemnification: Liability of Landlord."

Section 10.1, entitled "Mutual Indemnity Obligations," provides:

Landlord and Tenant shall each Indemnify the other against (a) any wrongful act, wrongful omission, or negligence of the Indemnitor; and (b) any breach or default by the Indemnitor under this Restated Lease or the Environmental Agreement. In addition to and without limiting the generality of the foregoing indemnity. Tenant shall Indemnify Landlord . . . against all the following matters (except to the extent any claim arises from any wrongful act, wrongful omission or negligence of Landlord . . .) relating to (t) . . . breach of Tenant's obligations to comply with Environmental Laws pursuant to Section 9.2; (u) the operation or occupancy of any Property; . . . [and] (x) the condition of any Property or of any street . . . adjoining such Property, whether or not such condition existed before [December 8, 2000] . . . . Notwithstanding anything to the contrary in the foregoing, neither party shall be required to Indemnify the other party from or against such other party's intentional acts or negligence.

25 Again, while the defendants quote these provisions, setting some

of them off in bold typeface, they do not explain which of the

many specific provisions within this section entitles them to

indemnification from Getty Marketing against the plaintiffs'

claims, and that proposition is not apparent to the court.

First, the defendants emphasize clause (b), which requires

Getty Marketing to indemnify them against "any breach or default

by [Getty Marketing] under this Restated Lease or Environmental

Agreement." But the defendants do not explain how Getty

Marketing's failure to remediate contamination on the property

amounts to a breach or default of any particular provision of

either agreement. Again, as discussed supra, the defendants

appear to concede that this is not a breach of section 9.2, and

they are collaterally estopped from showing that it is anyway.

This reasoning applies with equal force to the defendants'

suggestion that they are entitled to indemnification under clause

(t), which requires Getty Marketing to indemnify them against

matters relating to "breach of the Tenant's obligations to comply

with Environmental Laws pursuant to Section 9.2."

Second, the defendants quote clauses (u) and (x), which

require Getty Marketing to indemnify the defendants against

matters relating to "the operation or occupancy of any Property"

and "the condition of any Property . . . whether or not such

condition existed before" the effective date of the restated

26 Master Lease. While the plaintiffs' claims against the

defendants for continued LNAPL contamination appear to fit within

these provisions, neither they nor any other clause of section

10.2 applies "to the extent any claim arises from any wrongful

act, wrongful omission or negligence of Landlord." The

defendants simply ignore this limiting language, which is fatal

to any claim for indemnification under clause (u) or (x) or, for

that matter, any clause of section 10.1.7

The plaintiffs' claims against the defendants arise out of

the allegedly wrongful acts, omissions, and negligence of both

Power Test and Getty Properties in, among other things, allowing

the LNAPL releases from parcels 9 and 11 to continue. Indeed,

the hearing officer specifically found that Power Test, as the

owner of those parcels, was liable under the Rhode Island Oil

Pollution Control Act for failing to take any action to remediate

the leaching of petroleum into the aguifer below parcels 9 and

11. In re Getty Marketing Mktg., Inc., slip op. at 33-35. The

defendants do not guestion that this failure was a "wrongful

omission," or that it is the very same "wrongful omission" out of

which the plaintiffs' claims against them arise (again, they

simply ignore the final sentence of section 10.1 and the

7Ihis includes clause (a), which appears in the portion of section 10.1 guoted by the defendants, but to which they do not otherwise call attention.

27 limitation it places on both parties' indemnification obligations

under the Master Lease). So, given the hearing officer's finding

against Power Test--which, just like his findings in favor of

Getty Marketing, has preclusive effect here--the defendants are

not entitled to indemnification against the plaintiffs' claims

under clauses (u) and (x) of section 10.1. See Doralee Est. v.

Cities Serv. Oil Co.,

(2d Cir. 1977) (ruling

that, based on prior judicial finding that landlord failed in its

obligations to abate oil pollution on its property, it was not

entitled to indemnification from tenant under hold harmless

clause in lease) (applying New York law).

The defendants also guote Section 10.2, entitled "Liability

of Landlord," which states in relevant part that

Except with respect to the obligations of Landlord pursuant to the Environmental Agreement . . . , Tenant shall be deemed to be in exclusive control and possession of the Premises during the Term as provided in this Restated Lease. Landlord shall not be liable for any injury or damage . . . to any person occurring on or about any Property nor for any injury or damage to any property of Tenant, or of any other person, during the Term, unless caused by Landlord's . . . wrongful acts and/or omissions or acts of negligence or a breach of Landlord's obligations under this Restated Lease . . . . The provisions of this Restated Lease permitting Landlord to enter and inspect any Property . . . shall not be construed to impose upon Landlord any obligation, liability, or duty to third parties, but nothing in this Restated Lease shall be construed to exculpate, relieve, or Indemnify Landlord from or against any obligation, liability or duty of Landlord to third parties existing at or before the applicable Commencement Date [of February 1, 1997] or its

28 obligations arising under . . . the Environmental Agreement.

The defendants suggest that this section entitles them to

indemnification from Getty Marketing against the plaintiffs'

claims, which seek to recover damages that "occurred during the

term of the lease, as they arise out of LNAPL contamination

discovered in 2002."

As they do with section 10.1, however, the defendants simply

ignore the limiting language of section 10.2, which relieves them

of liability for such damages "unless caused by Landlord's . . .

wrongful acts and/or omissions or acts of negligence." As just

discussed, the plaintiffs claim injury from the nonfeasance of

the defendants, as well as that of Getty Marketing, in failing to

remediate contamination at the property, and the hearing officer

found Power Test liable for precisely that nonfeasance.

Just like section 10.1's indemnification provisions, then,

section 10.2's exculpatory provision does not shift liability for

the plaintiffs' claims against the defendants to Getty Marketing,

since those claims seek to recover for injury caused, at least in

part, by the defendants' wrongful acts. C f . Hogeland v. Sibley,

Lindsay & Curr Co.,

(N.Y. 1977) (ruling

that lease provision reguiring tenant to indemnify landlord

applied to third-party claim arising in part out of landlord's

negligence, despite exculpatory clause that "nothing in this

29 lease shall be construed to relieve the Landlord from

responsibility to the Tenant for any loss or damage caused the

Tenant wholly in part by the negligent acts or omissions of the

Landlord," because this clause "relate[d] only to loss or damage

[landlord] might occasion directly to [tenant]"). Again, the

defendants do not even acknowledge this exception to section

10.2, let alone provide any reasoned argument as to why it does

not apply here. That is fatal to any claim for indemnification

under section 10.2.

c. Environmental Agreement

Finally, the defendants rely on section IV.2 of the

Environmental Agreement. Like their reliance on section 25.3 of

the Master Lease, however, this appears to undermine, rather than

support, their contractual indemnification claim. Section IV.2

of the Environmental Agreement provides that,

notwithstanding anything to the herein, in the Restated Master Lease, or in any other agreement, any condition not in full compliance with any Environmental Law as of [December 8, 2000] at any . . . Petroleum Terminal Property shall not operate as a lease default and Tenant shall have no liability or obligation whatsoever to engage in any Remediation or any other compliance- related activity with respect to any such non- compliance condition . . . except when reguired by a bona fide claim asserted by . . . a party other than Landlord. Tenant shall not be reguired by a bona fide claim to take action if Tenant has a reasonable, good faith basis for asserting such a challenge or defense and if Tenant is, in fact, diligently challenging or defending against such Claim.

30 (emphasis added). Just as they do not question that the presence

of LNAPL on the property is a "Preexisting Environmental

Violation" under section 25.3 of the Master Lease, the defendants

also do not question that it is a "condition not in full

compliance with Environmental Law as of December 8, 2000" under

section IV.2 of the Environmental Agreement. Accordingly,

whatever obligations sections 9.2, 10.1, or 10.2 of the Master

Lease might impose upon Getty Marketing, by way of

indemnification or otherwise, it "shall have no liability or

obligation to engage in any Remediation or any other compliance-

related activity with respect to" the presence of LNAPL on the

property. But it is precisely such liability that the defendants

seek to impose upon Getty Marketing by demanding indemnification

from the plaintiffs' claims against the defendants for failing to

remediate the LNAPL contamination from the property.

In resisting this conclusion, the defendants point out that,

under section IV.2 of the Environmental Agreement, Getty

Marketing does have the obligation to remediate pre-existing

environmental violations "when required by bona fide Claim

asserted by . . . a party other than Landlord." The defendants

argue that the plaintiffs' claims against Getty Properties in

this action fit that description. Assuming for the moment that

the plaintiffs' claims, even in their disputed state, "require"

Getty Marketing to remediate the LNAPL contamination at the

31 property, it does not follow that those claims also obligate

Getty Marketing to provide indemnification from the plaintiffs'

claims against the defendants for their own alleged failure to

engage in such remediation. That is not what section IV.2

provides. To the contrary, it specifically provides that Getty

Marketing's obligation to remediate pre-existing environmental

violations must be triggered by a claim by "a party other than

Landlord." The defendants' indemnification claim, of course, is

a claim by the landlord--and, as a result, cannot obligate Getty

Marketing to remediate pre-existing environmental violations on

the property, even if the plaintiffs' own claims against Getty

Marketing ultimately could.

Furthermore, even if third-party claims that reguired Getty

Marketing to remediate pre-existing environmental violations on

the property did, as the defendants suggest, obligate it to

provide indemnification against claims against them seeking the

same relief, the plaintiffs' claims against Getty Marketing do

not yet "reguire" it to do that. To be sure, that is part of the

relief the plaintiffs seek, but section IV.2 does not, by its

terms, obligate Getty Marketing to remediate pre-existing

environmental violations simply because a third-party claim seeks

to reguire it to do so: Getty Marketing must be "reguired" by

the claim to do so. Indeed, the final sentence of section IV.2

specifically provides that Getty Marketing "shall not be reguired

32 by a bona fide Claim to take action if [it] has a reasonable,

good faith basis for asserting a challenge or defense and if

Tenant is, in fact, diligently challenging or defending against

such claim." Getty Marketing is challenging and defending the

plaintiffs' claims against it here (it has filed an answer

denying liability for those claims, as well as a motion for

summary judgment on them), and the defendants do not dispute that

it has a "reasonable, good faith basis for doing so."8

Instead, just as they do with the language of sections 10.1

and 10.2 of the Master Lease unfavorable to their position, the

defendants simply ignore this portion of section IV.2 of the

Environmental Agreement, going so far as to omit it from the

block guotation of this provision that appears in their summary

judgment memorandum. The defendants cannot engage section IV.2,

however, by ignoring part of it. The fact that Getty Marketing,

in good faith, is diligently challenging and defending the

plaintiffs' claims is itself fatal to the defendants' suggestion

that section IV.2 of the Environmental Agreement entitles them to

indemnification from the plaintiffs' claims against them.

More importantly, though, section IV.2 expressly states

that, with respect to "any condition not in full compliance with

8Indeed, as discussed infra at part III.B, the court rules that Getty Marketing's challenge to the plaintiffs' claims is not only reasonable, but correct as a matter of law, and grants summary judgment to Getty Marketing on those claims.

33 any Environmental Law" as of December 8, 2000, Getty Marketing

"shall have no liability or obligation whatsoever to engage in

any Remediation or any other compliance-related activity," and

that this rule governs " [n]otwithstanding anything to the

contrary" in the Environmental Agreement or Master Lease. It is

exceedingly difficult to read this provision as doing anything

else but relieving Getty Marketing of liability for environmental

violations on the property that existed before that date (unless,

as just discussed, a third-party claim imposes such liability).

The defendants do not offer any other reading of section IV.2,

nor, as stated several times already, do they guestion that the

LNAPL contamination on the property was a "condition not in full

compliance with any Environmental Law" as of December 8, 2000.9

9Instead, the defendants rely heavily on an unpublished letter opinion by a New Jersey trial court interpreting the Master Lease to reguire Getty Marketing to indemnify Power Test against claims of pre-existing environmental violations (specifically, underground storage tanks) at a different property. N.J. Sch. Constr. Corp. v. Power Test Realty Corp., No. UNN-L-400 9-06 (N.J. Super. C t . Civ. Div. Aug. 25, 2009), appeal dismissed,

(N.J. Super. C t . Ap p . Div. May 3, 2012). This court does not find the letter opinion instructive here. First, in reguiring Getty Marketing to indemnify Power Test against those claims, the court applied a section of the Master Lease that specifically allocates responsibility for underground storage tanks.

. There is no allegation here, by either the plaintiffs or the defendants, that the contamination on parcels 9 and 11 emanated from underground storage tanks. Second, after ruling that the Master Lease was ambiguous as to which party was ultimately responsible for the violations, the New Jersey court relied on testimony from two witnesses "involved in the drafting or execution of the master lease," finding their testimony that

34 Thus, even if the defendants could show that some provision of

the Master Lease entitles them to indemnification from Getty

Marketing against the plaintiffs' claims for failing to remediate

the LNAPL pollution at the property, section IV.2 of the

Environmental Agreement trumps, and prevents the defendants from

shifting that liability to Getty Marketing. Getty Marketing is

entitled to summary judgment on the defendants' contractual

indemnification claim. Conversely, the defendants' motion for

summary judgment on that claim is denied.10

(aside from underground storage tanks at other specified properties) Getty Marketing was "responsible for all other environmental conditions, even those arising from an unknown release . . . to be credible and in accordance with a fair and reasonable reading of the lease."

. Here, neither party has argued that the Master Lease is ambiguous such that it would be appropriate for this court to consider such testimony, nor have they offered any (aside from excerpts of testimony that Getty Marketing's chief operating officer gave the New Jersey court in which he demonstrated an inability to point to a particular provision of the Master Lease relieving his company of liability for pre-existing environmental violations, but this court is at a loss to see how that affects the meaning of the parties' agreements, particularly where, again, there is no suggestion they are ambiguous). Third, while the New Jersey court did not expressly consider section IV.2 of the Environmental Agreement, it relied on the fact that the state's Department of Environmental Management had ordered Getty Marketing to remediate the contamination on the property,

(which, as just discussed, would have amounted to bona fide claim reguiring Getty Marketing to carry out that remediation). The opposite, of course, happened here. Importantly, the defendants do not argue that the New Jersey opinion has any preclusive effect here, so this court has not considered that possibility.

10In support of that motion, the defendants guote, in a parenthetical, a portion of section 4.1 of the Master Lease,

35 2. Indemnification/contribution under Rhode Island law11

Getty Marketing also seeks summary judgment on the

defendants' claims for common-law indemnification and for

contribution under Rhode Island's version of the Uniform

Contribution Among Tortfeasors Act, R.I. Gen. Laws § 10-6-3.

Under Rhode Island law, "there are three elements to a claim for

eguitable indemnity . . . . first, the party seeking indemnity

must be liable to a third party, second, the prospective

indemnitor must also be liable to the third party, and, third, as

stating that "Tenant shall pay as Additional Rent and discharge . . . each and every item of expense, of every kind and nature whatsoever, related to or arising from the Premises, or by reason of or in any manner connected with or arising from the development, leasing, operation, management, repair, use or occupancy of the Premises or any Property or any portion thereof." But this provision is subject to several exceptions which the defendants, true to form, omit from their guotation. First, it does not apply to "legal . . . and other similar costs incidental to Landlord's ownership of its fee or leasehold interest in any Property, other than Legal Costs that Tenant has expressly agreed to pay" (because the defendants ignore this exception, they do not point to any express agreement elsewhere in the lease for Getty Marketing to pay the defendants' costs of defending against third-party environmental claims). Second, and more importantly, section 4.1 applies only "except as specifically set forth to the contrary in this Restated Lease" and does not apply to "the obligations of Landlord set forth in . . . the Environmental Agreement" (section IV.2 of which, by its own terms, controls notwithstanding anything to the contrary in the Master Lease). Insofar as the defendants have even properly raised section 4.1 in support of their contractual indemnification claim, then, it does not help them.

“ Despite the provisions for New York law in the Master Lease and Environmental Agreement, the parties agree that Rhode Island law governs the defendants' claims for common-law indemnification and for contribution.

36 between the prospective indemnitor and indemnitee, equity

requires the obliqation to be discharqed by the potential

indemnitor." Wilson v. Krasnoff,

(R.I. 1989).

"One situation satisfyinq this third element is when a potential

indemnitor is at fault and the prospective indemnitee is

blameless."

In movinq for summary judqment on the defendants' common-law

indemnification claim, Getty Marketinq arques that, inter alia,

the defendants cannot show they are "blameless" in light of the

hearing officer's finding that Power Test is liable for failing

to remediate the LNAPL contamination on its property. In

response, the defendants argue that "it is premature to state

that [Power Test] cannot prove it is blameless because [the

hearing officer's] decision may be reversed on appeal." As

already noted, however, the fact that a judgment has been

appealed does not diminish its preclusive effect under Rhode

Island law. See note 4, supra. Because the hearing officer's

finding against Power Test collaterally estops the defendants

from showing they are blameless on the plaintiffs' claims, Getty

Marketing is entitled to summary judgment on the defendants'

claim for common-law indemnification against those claims.12

12While, as Wilson suggests, there are other situations, aside from the indemnitee's blamelessness, under which "equity requires the obligation to be discharged by the potential indemnitor," the defendants do not identify any. Instead, they

37 The hearing officer's findings likewise estop the defendants

from prevailing on their contribution claim. While "[t]he right

of contribution exists among joint tortfeasors" under Rhode

Island's version of the Uniform Contribution Act, R.I. Gen. Laws

§ 10-6-3, "'joint tortfeasors' means two or more persons jointly

or severally liable in tort for the same injury to person or

property," id. § 10-6-2. As already discussed at length, the

hearing officer's finding that Getty Marketing is not liable for

failing to remediate the LNAPL contamination at the defendants'

property. In re Getty Marketing Mktg., Inc., slip op. at 27,

precludes the defendants from making the contrary showing that

Getty Marketing is in fact liable for that contamination, see

Part III.A.l, supra. As also already discussed, the preclusive

effect of that finding on the defendants is undiminished by its

lack of preclusive effect on the plaintiffs, who, unlike the

defendants, were not parties to the DEM proceedings. See id.

argue that the hearing officer's findings are not "determinative of whether [Getty Marketing] is blameless for [the plaintiffs'] alleged damages." The court disagrees (for the reasons explained at Part III.A.l, supra, the findings that Getty Marketing is not responsible for remediating the contamination at the property are binding on the defendants) but, in any event, the defendants cannot prevail on their common-law indemnification claim simply by proving that Getty Marketing is not blameless. They must also prove that they are blameless, which the hearing officer's contrary finding precludes them from doing. (While the hearing officer found that only Power Test, and not Getty Properties, was liable for failing to remediate the contamination, that liability ultimately belongs to Getty Properties as Power Test's general partner. See note 1, supra.)

38 Because the defendants are estopped from showing that Getty

Marketing is "liable in tort" for the contamination to the

plaintiffs' property, Getty Marketing is entitled to summary

judgment on the contribution claim.

B. Summary judgment on the plaintiffs' claims

Getty Marketing has also moved for summary judgment on all

of the plaintiffs' claims against it set forth in the second

amended complaint: nuisance, negligence, trespass, and violation

of the Rhode Island Water Pollution Control Act, R.I. Gen. Laws

§ 46-12-21. As to the plaintiffs' common-law claims, Getty

Marketing argues that, because it had no knowledge of the LNAPL

contamination at the time it began its tenancy over parcels 9 and

11 and their pipelines, it can have no liability to adjacent

landowners like the plaintiffs for failing to remediate the

contamination, under a theory of negligence, nuisance, or

trespass. Getty Marketing argues that it has no liability under

the Water Pollution Control Act either because (a) there is no

evidence that LNAPL was discharged onto the property prior to the

1980 effective date of the Act, which does not apply

retroactively, and (b) in any event, there is also no evidence

that Getty Marketing "negligently or intentionally pollute[d]

groundwater" so as to violate the Act.

39 As fully explained below, no Rhode Island court appears to

have considered whether contamination on leased premises,

existing at the commencement of the tenancy, exposes the tenant

to common-law liability to adjacent landowners simply because the

contamination was not discovered until the tenancy commenced.

Indeed, the plaintiffs have not provided (nor has this court's

research uncovered) a single case from any jurisdiction imposing

common-liability under these circumstances. So this court,

sitting in diversity, declines to recognize that novel theory of

liability here, and grants summary judgment for Getty Marketing

on the plaintiffs' common-law claims. The plaintiffs do not even

address Getty Marketing's argument that their Water Pollution

Control Act claim fails for the lack of evidence that they in

fact polluted groundwater, so the court grants summary judgment

for Getty Marketing on that claim as well.

1. Common-law claims

As already noted, the plaintiffs have disavowed any claim

that Getty Marketing caused the release of LNAPL damaging their

property, or even that the release occurred during Getty

Marketing's tenancy. See Part III.A.l, supra. Instead, the

plaintiffs argue that, regardless of when the release occurred,

Getty Marketing has a common-law "duty to abate [it] because

[Getty Marketing] learned about the contamination at least over

40 eight years ago and it has control over the . . . property from

which the LNAPL still flows" (footnote omitted). Again, though,

the plaintiffs have not come forward with a case--from Rhode

Island or otherwise--imposing common-law liability on a tenant to

a neighboring landowner for contamination on the premises that

existed prior to the commencement of the tenancy, and this

court's research has not turned up any.

Where, as here, state law provides the rules of decision in

a case in this court, it must "interpret[] and apply[] the rules

of substantive law enunciated by the state's highest judicial

authority, or, on guestions to which that tribunal has not

responded, making an informed prophecy of what the court would do

in the same situation." Blinzler v. Marriott Int'l, Inc.,

(1st Cir. 1996) (footnote omitted). To do so,

this court may "seek guidance in analogous state court decisions,

persuasive adjudications by courts of sister states, learned

treatises, and public policy considerations identified in state

decisional law."

But "[a] federal court sitting in

diversity must take care not to extend state law beyond its well-

marked boundaries" and "exercise considerable caution when

considering the adoption of a new application of state law that

could expand its present reach." Braga v. Genlyte Group, Inc.,

(1st Cir. 2005) (guotation marks omitted).

Honoring these principles, this court cannot say that Rhode

41 Island tort law would recognize the plaintiffs' common-law claims

against Getty Marketing.

a. Trespass

In support of their trespass claim, the plaintiffs rely

solely on section 161(2) of the Restatement (Second) of Torts.

That reliance, however, is misplaced. Under section 161(2),

trespass may be committed by the continued presence on the land of a . . . thing which the actor's predecessor in legal interest therein has tortiously placed there, if the actor, having acguired his legal interest in thing with the knowledge of such tortious conduct or having thereafter learned of it, fails to remove the thing.

Restatement (Second) of Torts § 161(2) (1977).

Assuming, without deciding, that the LNAPL contaminating the

plaintiffs' property amounts to a "thing . . . tortiously placed

there" under this rule, it still fails to accommodate the

plaintiffs' trespass theory because they have not alleged, let

alone come forward with any evidence, that this was perpetrated

by Getty Marketing's "predecessor in legal interest therein."

Indeed, the plaintiffs make no attempt to identify who "placed"

the LNAPL on their property, let alone any relationship between

that person and Getty Marketing. Nor do they provide any other

authority or reasoned argument to support their trespass theory.

Getty Marketing is entitled to summary judgment on that claim.

42 b. Nuisance and negligence

As the plaintiffs point out, Rhode Island law recognizes

that "[o]ne who controls a nuisance is liable for damages caused

by that nuisance," even if "the one in control did not create the

nuisance." Friends of the Sakonnet v. Dutra,

(D.R.I. 1990). The court in Friends of the Sakonnet,

however, did not consider whether a tenant "controls" the

nuisance created by contamination on the leasehold, existing but

unknown at the start of the tenancy, so as to become liable for

the harm that the contamination causes a neighboring landowner.

The court simply found the purchasers of a subdivision--serviced

by an inadeguate sewer system installed by the original

developers--liable for any resulting nuisance because the

purchasers had "retained control of the sewerage system on their

land."

(emphasis added). The court explained that

"[s]uccessors-in-interest can be held liable for abating the

nuisance created by their predecessors."

at 395 (citing

Restatement (Second) of Torts § 839 (1977)).

As just noted, however, the plaintiffs do not even claim

that the LNAPL contamination on parcels 9 and 11 was created by

Getty Marketing's predecessors-in-interest. Nor do they explain

how Getty Marketing "controls the nuisance"--which, here, is the

presence of LNAPL contamination on parcels 9 and ll--in the sense

that the subdivision owners in Friends of the Sakonnet "retained

43 control of the sewerage system." Instead, the plaintiffs argue

that Getty Marketing's liability for that contamination arises

from its "control over the property" by virtue of its lease.

In support of this theory, the plaintiffs rely heavily on

cases from other jurisdictions cited in the reporter's note to

section 18.1 of the Restatement (Second) of Property: Landlord

and Tenant (1977). None of those cases, though, recognized that

a tenant came to "control" a nuisance on the leased premises

merely by virtue of its occupancy. Instead, the tenant in each

of those cases, at a minimum, made use of the feature

constituting the nuisance during its occupancy. See Reinach v.

City & County of S.F.,

(Cal. Dist. C t .

App. 1958) (service station driveway); Kelley v. Laclede Real

Estate & Inv. C o .,

(Mo. 1941) (exterior wall

of leased building); Scott v. Olivia,

(Minn.

1961) ("tenant was in possession of and controlled that portion

of the building which was the cause of the dangerous condition,"

i.e., downspout "common to and for the benefit of the entire

premises") (emphasis added); Dodson v. New Eng. Trust Co.,

(Ohio C t . App. 1946) ("subspace [that] could

be and was used as additional basement").13 Indeed, one of these

13This is also true of two of the other cases the plaintiffs cite, both of which held a tenant liable for injuries that snowfall upon the roof of the building caused a pedestrian using an adjacent public sidewalk. See Calway v. William Schaal & Son,

44 cases specifically rejects the plaintiffs' view that the tenant's

mere occupancy of the premises amounts to "control" over all pre­

existing nuisances so as to create a duty to abate, observing

that "it may not be fairly said that under all circumstances a

tenant would be obligated to make extensive changes in the basic

structure of the building in order to eliminate a nuisance

created by the landlord." Scott,

.

The Restatement of Property appears to endorse this view,

citing Scott for the proposition that "[w]here the tenant does

not have sufficient control to make the necessary repairs, the

tenant should not be held liable," and further noting "authority

for the proposition that where abatement of the dangerous

condition would reguire reconstruction rather than repair, the

tenant is likewise not liable." Restatement (Second) of

Property: Landlord and Tenant § 18.1 n.6 (1977) (citing Knauss v.

Brua,

(1884)). Knauss called it "a proposition too

(Conn. 1931); Keeler v. Lederer Realty Corp.,

(R.I. 1904). It is worth noting that not only these cases, but also all of those from the Restatement (Second) of Property that the plaintiffs cite, arose out of an accident on a sidewalk adjacent to the property that happened due to some defect in the construction or the maintenance of the premises, as opposed to contamination that occurred without fault on part of either the landlord or the tenant. While the other case the plaintiffs cite, Bridgeton v. B.P. Oil, Inc.,

(N.J. Super. C t . Law Div. 1976), did involve contamination (albeit to the leased premises themselves, rather than to a neighboring site), the tenant there--like the tenant in all the other cases-- made use of the feature causing the contamination, by storing its oil in tanks that had developed leaks prior to the tenancy.

45 plain for discussion" that "as to . . . third persons, the tenant

was not obligated to abate a nuisance created by his landlord,"

at least where the tenant had not "contributed to the nuisance"

by his use of the feature constituting it.

.

Other authorities have likewise concluded that "the law is

well-established that in this situation . . . [a] lessee could

not be held liable for a defective condition in the leased

premises, or for a nuisance, which caused injury and damage to

the . . . adjoining property, when such defective condition, or

nuisance, was present when it took over under the lease." Malco-

Ark. Theatres v. Cole,

(Ark. 1939) (rejecting

claim against lessee, on the theory that it "operated and

controlled and had charge" of neighboring property, for damage

due to storm runoff); see also Mitchell v. Foran,

(Kan. 1936); Lindemann v. F. W. Woolworth Co.,

(N.J. 1939); 52A C.J.S. Landlord & Tenant § 1017 (2005);

c f . Hogg v. Chevron U.S.A.,

(La. C t . App. 2010)

(rejecting claim against lessee of filling station to recover for

contamination of neighboring property because, among other

things, he "was not the lessee at the time of the incident"

giving rise to the contamination). Again, the plaintiffs do not

cite any caselaw to the contrary.

Instead, the plaintiffs rely heavily on two provisions from

the Restatement (Second) of Torts. The first, which the

46 plaintiffs cite in support of their negligence theory, states

that "[o]ne who takes possession of existing land upon which

there is an existing structure or other artificial condition

unreasonably dangerous to persons or property outside of the land

is subject to liability for physical harm caused to them by the

condition," if, among other things, "he has failed, after a

reasonable opportunity, to make it safe or otherwise protect such

persons against it." Restatement (Second) of Torts § 366 (1977).

The plaintiffs point out that this rule "applies to persons

acguiring possession of land by purchase, gift, lease, devise, or

otherwise." Id. cmt. b (emphasis added). Section 366 further

provides that it "should be read together with § 839, as to

liability for a private nuisance." Id. cmt. a.

Section 839, on which the plaintiffs rely in support of

their nuisance claim, provides that "[a] possessor of land is

subject to liability for a nuisance caused while he is in

possession by an abatable artificial condition on the land, if,"

among other things, "he has failed after a reasonable opportunity

to take reasonable steps to abate the condition or protect the

affected persons against it." Id. § 839. As the plaintiffs

emphasize, this

liability is not based upon responsibility for the creation of the harmful condition, but upon the fact that [the possessor] has exclusive control over the land and the things done upon it and should have the responsibility of taking reasonable measures to remedy

47 conditions on it that are a source of harm to others. Thus a vendee or lessee of land upon which a harmful physical condition exists may be liable under the rule here stated for failing to abate it after he takes possession . . . even though he had no part in its creation.

Id. cmt. d (emphasis added) .

As Getty Marketing emphasizes, however, this comment states

that a lessee who takes possession of premises subject to an

existing nuisance "may be liable"--not that he i_s liable--for

failing to abate it. Instead, as the comment explains, the

tenant's liability for a pre-existing nuisance turns on his

degree of "control over the land and the things done upon it."

As just discussed, that is the lesson of § 18.1 of the

Restatement (Second) of Property: Landlord and Tenant and the

cases it cites: while a tenant can incur liability for a pre­

existing nuisance on the premises by making use of the

instrumentalities that constitute, or by otherwise controlling,

the nuisance, this liability does not follow from the simple fact

of the tenancy itself. Here, though, the plaintiffs rely solely

on Getty Marketing's status as a tenant in seeking to hold it

liable for failing to abate the pre-existing contamination on the

property after learning of it.

Furthermore, even if comment d to § 839 supported such a

theory of liability, another comment (and the accompanying

illustration) to the same section makes clear that it still would

48 not support the plaintiffs' common-law claims against Getty

Marketing here. Section 839 makes a possessor of land liable

only for a "nuisance caused . . . by an abatable artificial

condition," and "even though it might conceivably be possible to

abate a particular condition, it is not 'abatable' within the

meaning of this Section unless its abatement can be accomplished

without unreasonable hardship or expense." Restatement (Second)

of Torts § 839 cmt. f. To illustrate, the Restatement explains:

A is in possession of land upon which is situated a tank for the storage of petroleum. B is in possession of land 500 yards from this tank. Without A's knowledge of negligence the tank develops an underground leak and a guantity of oil flows out, saturates A's land and drains into an unknown subterranean stream that carries it to B's land. As a result, B's well that supplies his drinking water is polluted and rendered unfit for use. When A learns of this he immediately removes all the remaining oil from the tank but the oil already in his land continues to pollute B's well for some time. It is found that A's maintenance of the oil tank was not abnormally dangerous. A is not liable to B for failing to take action to remove the oil already in his land, since it would not be practicable to do so.

Id. § 839 cmt. f. ill. 1 (emphasis added). That hypothetical

more or less describes the undisputed facts of this case. Once

Getty Marketing learned of the contamination in the wells

adjacent to the plaintiffs' property, it checked for leaks in all

of the active pipelines on the leased premises, but found no

evidence of any, and subseguent testing revealed that the

substance polluting the wells did not come from the tanks on the

49 leased premises either. While, the plaintiffs allege, that

pollution continues to migrate onto their property, comment f and

illustration 1 make clear that Getty Marketing is not liable for

failing to abate that condition--even assuming that Getty

Marketing, simply by commencing its tenancy, could have acguired

the duty to abate any pre-existing nuisance there.

Again, the plaintiffs have not come forward with any case,

from any jurisdiction, applying §§ 366 or 839 of the Restatement

(Second) of Torts (or the principles they recognize) to hold a

tenant liable for pre-existing contamination on the leasehold.

Nor, significantly, does any such case appear among those cited

in the Restatement's annotations to these sections. Since they

were published more than 35 years ago, one would expect such a

case to exist--if, in fact, the Restatement supports the

plaintiffs' theory of liability. Thus, the fact that neither the

reporters of the Restatement, the plaintiffs, nor this court has

located such a case lends further support to the conclusion that

the Restatement simply does not support the plaintiffs' common-

law claims against Getty Marketing.

The plaintiffs' theory of Getty Marketing's common-law

liability, then, appears to be unprecedented in any jurisdiction.

This is unsurprising, because holding a tenant liable for failing

to abate pre-existing contamination on the leasehold, simply

because the tenant had the misfortune of possessing the leasehold

50 at the time the contamination was discovered, would represent a

dramatic--and haphazard--expansion of tort law. Indeed, the

plaintiffs' theory would apply not only to an international oil

company leasing a marine terminal, like Getty Marketing, but also

to a family leasing a single-family home who discovers, during

their tenancy, that heating oil which leaked from an unused

storage tank long before they moved in has contaminated their

neighbors' properties. The plaintiffs have not articulated any

sound policy reason for subjecting a blameless party to that kind

of potentially ruinous liability.

In any event, as discussed at the outset, this court has "no

warrant to extend state [tort] law." Hatch v. Trail King Indus.,

Inc.,

(1st Cir. 2011). This court has no reason

to believe that Rhode Island would recognize a theory of common-

law liability that has yet to be recognized there or, so far as

this court can tell, in any state. Accordingly, Getty Marketing

is entitled to summary judgment on the plaintiffs' negligence and

nuisance claims.

2. Water Pollution Control Act

Under Rhode Island's Water Pollution Control Act, "[a]ny

person who shall negligently or intentionally pollute groundwater

shall be liable to any other person who is damaged by that

pollution." R.I. Gen. Laws § 46-12-21. While the Act does not

51 define "pollute," the term "polluting" is defined as "the causing

of pollution." Id. § 46-2-1. As noted supra, Getty Marketing

has moved for summary judgment on the plaintiffs' claim under

this statute on two independent bases: there is no evidence

(a) that LNAPL was discharged onto the property prior to the 1980

effective date of the Act, which does not apply retroactively, or

(b) that Getty Marketing "pollute[d] groundwater."

While the plaintiffs argue (albeit without pointing to any

supporting evidence) that a material factual dispute exists as to

when the discharge occurred, they do not address Getty

Marketing's point that they lack proof that it "polluted

groundwater." Again, there was no evidence of any leak in the

pipelines in use by Getty Marketing, and testing indicated that

the LNAPL migrating onto the plaintiffs' property had not come

from the storage tanks on Getty Marketing's leasehold, so the

basis of any claim that it "caused" the LNAPL pollution is

unclear. Indeed, though his decision is not binding on the

plaintiffs, the hearing officer concluded that Getty Marketing

was not liable under the Water Pollution Control Act merely for

failing to remediate pollution on its leasehold that it did not

release. In re Getty Marketing Mktg., Inc., slip op. at 35.

In any event, by failing to address Getty Marketing's

contention, in support of its summary judgment motion, that the

plaintiffs lack evidence that it "polluted groundwater" in

52 violation of the Water Pollution Act, the plaintiffs have waived

any argument to the contrary. "If a party fails to assert a

legal reason why summary judgment should not be granted, that

ground is waived." Grenier v. Cyanamid Plastics, Inc.,

(1st Cir. 1995) (guotation marks omitted). Getty

Marketing is entitled to summary judgment on the plaintiffs'

claim under the Water Pollution Control Act.

IV. Conclusion

For the foregoing reasons, Getty Marketing's motion for

summary judgment on the defendants' third-party claims14 is

GRANTED, the defendants' cross-motion for summary judgment on its

contractual indemnification claim against Getty Marketing14 is

DENIED, and Getty Marketing's motion for summary judgment on the

plaintiffs' claims15 is GRANTED. Getty Marketing is DISMISSED

from the case. Counsel for the remaining parties shall contact

the undersigned's deputy clerk to schedule a status conference to

discuss a schedule for resolving the balance of the litigation

through further motion practice or trial.

14Document no. 27.

14Document no. 40.

15Document no. 49.

53 SO ORDERED.

( /K Joseph /United States District Judge

Dated: January 11, 2013

cc: Gerald J. Petros, Esq. Robert K. Taylor, Esq. Alexandra K. Callam, Esq. Mitchell R. Edwards, Esq. Jennifer R. Cervenka, Esq. Mark W. Freel, Esq.

54