Sitting on Your Rights

On Behalf of | Aug 29, 2007 | Insurance Claim |

Your father founded a company in 1958 called Old Painters, Inc. From 1965 to 1976, Old Painters, Inc. disposed of hazardous waste from its paint plant in a lagoon located on the company property in Anytown, New York. In 1986, your father retired, and you took over the operation of the company. In 1988, the regulatory authorities investigated your company’s property for the possible disposal of hazardous wastes. In 1990, Old Painters, Inc. entered into a Consent Order with the New York State Department of Environmental Conservation and the United States Environmental Protection Agency to investigate environmental impacts and to undertake remediation at your company’s hazardous waste disposal lagoon.

In 1991, your company, Old Painters, Inc., contacted Litt & Gate, Inc (“Litt & Gate”) the owner of the property adjacent to your plant and obtained permission to place a cluster of monitoring wells on the property. In 1992, your company, as part of the remediation effort and Consent Order published the “Site Status Report to the Public,” which graphically illustrated that the plume of heaviest contamination extended under all of Litt & Gate’s property. You sent a copy of the report to Litt & Gate with its property outlined in red ink. You specifically advised Litt & Gate in the transmittal letter accompanying the document that “all of your property is located within the hazardous waste plume.”

Between 1991 and 1992, your company took additional remedial measures to stop the migration of the hazardous waste onto Litt & Gate’s property. In an attempt to minimize further contamination of Litt & Gate’s property, your company installed a groundwater cutoff or slurry wall to vertically enclose the original disposal pit on your property. This measure was completely unsuccessful.

In 1993, as part of the Consent Order, you sent Litt & Gate extensive technical data on the remediation effort, the failure of the slurry wall to stop the migration of hazardous wastes onto its property and enclosed a map on which you again identified Litt & Gate’s impacted property by outlining the property in red ink. In your correspondence, you notified Litt & Gate that all of the wells installed on its property indicated that extensive contamination was present. You expected to be in litigation with Litt & Gate over the impact that your site had on the property during the time of the remediation, but you never heard a word regarding any kind of litigation, until yesterday.

Yesterday, a sheriff’s deputy served a summons and complaint on your company. Litt & Gate has sued your company alleging that the hazardous wastes deposited by Old Painters, Inc. had contaminated Litt & Gate’s property. Litt & Gate alleges in the complaint that your company is also continuing to contaminate its property due to the continued presence of these hazardous wastes which constitute a continuing trespass and a continuing nuisance on Litt & Gate’s property. Litt & Gate seeks compensatory and punitive damages from your company due to the diminished value of its property, and compensatory and punitive damages for the continuing trespass and continuing nuisance, and an injunction ordering your company to prevent any further contamination of Litt & Gate’s property. As you read the Summons and Complaint served on your company, you say to yourself, “I can’t say that I didn’t expect it.”

You contact your environmental attorney, and you explain that you have been sued by Litt & Gate. You tell your attorney that clearly the contamination is from your company, and that you do not expect that you have any defenses to the lawsuit. Your attorney reads over the allegations in the complaint, reviews your entire file on the remediation, including the notices sent to Litt & Gate in 1991 and in 1993, and cautions you not to be so quick to concede defeat on this matter.

Your attorney explains that you have a real possibility of winning this case. Your attorney explains that the outcome of this case will depend on how the New York Courts apply and interpret New York’s following law:

Notwithstanding the provisions of section 214, the three year period within which an action to recover damages for personal injury or injury to property caused by the latent effects of exposure to any substance or combination of substances, in any form, upon or within the body or upon or within property must be commenced shall be computed from the date of discovery of the injury by the plaintiff or from the date when through the exercise of reasonable diligence such injury should have been discovered by the plaintiff, whichever is earlier

(CPLR 214-c[2]).

Your attorney explains that the above type of law is called a “statute of limitations.” Such a statute limits someone’s time within which he or she may recover damages from someone else. To determine if this statute will prevent Litt & Gate from recovering its damages from your company, your attorney tells you that the courts must look for “clarity and certainty of expression” when construing the statute. As to the very statute at issue, the most powerful court in New York, the New York Court of Appeals, stated:

CPLR 214-c is a remedial statute and such statutes should be liberally construed to effectuate their aims * * * [and] must be given a meaning consistent with the words chosen by the Legislature — those words define the scope of the remedy that the Legislature deemed appropriate.

Enright v Lilly & Co., 77 NY2d 377, 385 (19__), cert denied 112 S Ct 197 (19__).

Therefore, your attorney explains, by its very terms, CPLR 214-c[2] applies to actions “for damages for * * * injury to property caused by the latent effects of exposure to any substance.” The all-encompassing words chosen by the New York Legislature leaves no room for judicial insertion of qualification or exceptions by interpretation, especially when the context and evolution of this particular statute of limitations is examined (Enright v Lilly & Co., supra, at 385)

You ask your lawyer if this statute affects the claims against your company for continuing trespass and continuing nuisance. Those are not environmental claims. What good is it to get some claims thrown out if you can’t get all of the claims thrown out. Your attorney agrees with you. Continuing nuisance and continuing trespass are not “environmental claims” unless the claims involve environmental harm. If the claims involve environmental harm, the court held in Jensen et. al., v. General Electric Company, 82 N.Y.2d 77, (1993) that:

[W]e discern no evidence in explicit words, legislative history or manifest intent that the Legislature chose to exempt continuing nuisance and continuing trespass actions from the comprehensive scope and language of this intensely negotiated legislation. . . . The statute was enacted to “provide relief to injured New Yorkers whose claims would otherwise be dismissed for untimeliness simply because they were unaware of the latent injuries until after the limitation period had expired” (Mem of Senator R.B. Stafford, reprinted in 1986 Legis Ann at 287).

Prior to enacting this legislation, a New Yorker had to file suit within three years of the hazardous substances becoming located on the property. After the law was changed in 1986, a person had three years to file suit after the person discovered the existence of the hazardous substance on his or her property. Governor Cuomo emphasized in his Approval Memorandum when attending the signing of this long-awaited legislation:

[CPLR 214-c(2) is] a fair and simple rule which permits a person to discover his or her injury before the statutory time period for suit begins to run.

(1986 Legis. Ann. at 288).

Prior to the enactment of CPLR 214- c[2], the Statute of Limitations began to run as of the date of exposure, regardless of the date on which the injury was discovered (Snyder v Town Insulation, Inc., 81 NY2d 429 (19__). You ask your attorney to explain how this law will impact the litigation with Litt & Gate. Your attorney explains that it is undisputed that Litt & Gate was aware of the injury to its property as early as 1991, six years before filing its lawsuit against your company. Thus, Litt & Gate’s causes of action for damages could have been and should have been timely brought within three years after it first learned of the injury to its property. Since Litt & Gate chose not to litigate within the three years after learning of the injury to its property, they are time-barred by CPLR 214-c[2]. In other words, your company wins because Litt & Gate chose to sit on its rights instead of pursuing the rights given to all citizens — the right to recover damages from the person who caused the harm within the governmentally established time for pursuing those rights. Because Litt & Gate did nothing within the three years after it first learned of the harm to its property, Litt & Gate can now recover nothing on its claim against your company, regardless of whether your company is to blame for the harm.

Statutes of limitations get more clients, and more lawyers, into serious trouble than almost any other law. I always advise clients about the statutes of limitation when a client is trying to decide whether or not to sue someone. Some states, such as New York, have passed specific environmental statutes of limitation. These statutes are designed to encourage timely action with ample time allowances by injured parties with knowledge of their injuries. These laws are designed to discourage people from sitting on their rights and inhibiting early intervention by the courts for redressing the harm done to a person. In New York, the statute of limitations for environmental harm is three years. The time in which to bring a lawsuit in other states will vary depending on what the legislature has set forth in its laws.

If you believe that you may have a cause of action for environmental damage against a person or company, do not sit on your rights. Determine when the applicable statute of limitations will prevent you from litigating to recover your damages, and then decide whether or not to go forward with the litigation. Do not do as Litt & Gate did — file a lawsuit and then realize that there is no chance of recovery. Of course, if you happen to be Old Painters, Inc., the best thing to do is lay low and hope for the best — at least until the statute of limitations expires.

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