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Atlantic Holdings Ltd. v. Apollo Metals, Ltd.

United States District Court, E.D. Pennsylvania

December 11, 2017

ATLANTIC HOLDINGS LIMITED, Plaintiff,
v.
APOLLO METALS, LTD., et al., Defendants.

          MEMORANDUM

          STENGEL, C.J.

         I. INTRODUCTION

         This is a groundwater contamination dispute between neighboring owners of industrial properties in Bethlehem, Pa. The plaintiff, Atlantic Holdings Limited, filed claims against the defendants, Apollo M s, Ltd. and Apollo M s, Inc., under state and federal law.

         The defendants filed a motion for partial summary judgment on the plaintiff's four state law tort claims, [1] arguing that Pennsylvania's two-year statute of limitations precludes these claims. Each side briefed the matter and presented its case at a hearing on Nov. 28, 2017. Taking into consideration the parties' briefings and oral arguments, I will deny the defendants' motion because there are genuine issues of material fact as to whether Atlantic knew or should have known, more than two years before filing its 2014 lawsuit, of contamination on its property stemming from Apollo's property.

         II. BACKGROUND

         Atlantic, a Pennsylvania company, operates a commercial storage facility on its property, which it purchased in 1997. (Compl. ¶¶ 4, 9, Doc. No. 1.) Apollo, also a Pennsylvania company, purchased its neighboring property seven years earlier, in 1990, and operates a steel manufacturing facility. (Id. ¶ 12.) Atlantic's property is “immediately adjacent to, and downgradient from” Apollo's. (Id. ¶ 10.) Atlantic alleges that its groundwater has become polluted by hexavalent chromium and TCE, pollutants that migrated from the defendant's property. (Id. ¶¶ 13-14.)

         The plaintiff claims that the presence of these pollutants on its property “was confirmed in an October 2012 environmental covenant” between the defendants and the Pennsylvania Department of Environmental Protection (“PADEP”), which “imposed certain use and activity limitations on Defendants' property” and properties impacted by the migrating groundwater pollution. (Id. ¶¶ 15-16.)

         Sometime around 2012, the defendants offered to “close three existing, inactive wells” on the plaintiff's property. (Id. ¶ 19.) Curious as to why the defendants would make such an offer, the plaintiff hired American Analytical & Environmental Inc. (“AAE”) to assess the situation. (Id. ¶ 20.) AAE did so and provided Atlantic with a report in Feb. 2013, which explained that hexavalent chromium and TCE had migrated from underneath the defendants' property to Atlantic's. (Id. ¶ 21.) AAE also informed Atlantic that the covenant between the defendants and the PADEP prevented Atlantic from using the groundwater underneath its property and required PAEDP approval to initiate the use of its existing but inactive wells. (Id. ¶ 22.) This restriction on the plaintiff's property is significant because the plaintiff had planned to install a geothermal heating system, which would use the well water. (Id. ¶ 24.)

         While the plaintiff contends that the Feb. 2013 AAE report, which it commissioned after the defendants offered to pay to close its wells, triggered the tolling of the statute of limitations, the defendants argue in their motion for partial summary judgment that the statute of limitations began running either in 2004 or 2007, thereby barring the four state tort claims.

         III. PROCEDURAL HISTORY

         The plaintiff initiated this dispute in the Lehigh County Court of Common Pleas on Oct. 1, 2014. (Defs.' Mot. for Partial Summ. J. 1, Doc. No. 27.) Eventually, Atlantic discontinued its state court claims and initiated this federal lawsuit on Nov. 30, 2016. (Id.) On Aug. 16, 2017, Apollo filed a motion for partial summary judgment on the plaintiff's four Pennsylvania common law tort claims, arguing that the state statute of limitations had run. (Doc. No. 27.) On Sept. 11, 2017, Atlantic filed its response. (Doc. No. 30.) And on Oct. 3, 2017, Apollo filed its reply. (Doc. No. 31.) At a hearing on Nov. 28, 2017, the parties argued their respective sides of the dispute. The issue is now ripe for decision.

         IV. LEGAL STANDARD

         A court shall grant summary judgment where “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 fact is “material” if it would affect the outcome of the case under applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed issue is “genuine” if it would allow a reasonable fact-finder to return a verdict in favor of the nonmoving party. Id. Summary judgment is appropriate when the nonmoving party fails to provide evidence “sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         The party seeking summary judgment must inform the court of the basis for its motion and identify the portions of the record that demonstrate “the absence of a genuine issue of material fact.” Id. at 323. Relevant portions of the record include “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1). Alternatively, the moving party can show “that the materials cited [by the nonmoving party] do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Id.

         When determining whether to grant summary judgment, a court must draw “all justifiable inferences” in favor of the nonmoving party and must conclude not whether “the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented.” Anderson, 477 U.S. at 252, 255.

         IV. DISCUSSION

         The defendants contend that partial summary judgment in their favor is warranted because Pennsylvania's statute of limitations bars the plaintiff's four tort claims- negligence, trespass, nuisance, and strict liability (counts V-VII). (Defs.' Mot.) Based on the following analysis, I find that summary judgment is not proper because the statute of limitations determination hinges on questions of material fact that a jury must decide.

         Pennsylvania imposes a two-year statute of limitations on “tortious conduct, ” which encompasses the four claims noted above. See 42 Pa. C.S. § 5524(7) (2017). It is well established that federal courts must apply state statutes of limitation to state law claims. See Guaranty Trust Co. of N.Y. v. York, 326 U.S. 99, 110 (1945).

         A. Pennsylvania's Statute of Limitations and the Discovery Rule Exception

         The Pennsylvania Supreme Court thoroughly articulated the application of and exceptions to Pennsylvania's statute of limitations in a 2005 negligence case. See Fine v. Checcio,870 A.2d 850 (Pa. 2005). Generally, limitations periods in Pennsylvania begin tolling “when the plaintiff could have first maintained the action to a successful conclusion.” Id. at 857 (citing Kapil v. Ass'n of Pa. State Coll. and Univ. Faculties, 470 A.2d 482, 485 (1983)). The discovery rule is an exception to this general principle; it tolls the limitations period while a party “who has not suffered an immediately ascertainable injury is reasonably unaware he has been injured.” Id. at 858 (citing Hayward v. Med. Center of Beaver Cty., 608 A.2d 1040, 1043 (1992), abrogated by Fine, 870 A.2d 850). When this discovery rule exception ...


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