Free Motion for Reconsideration - District Court of Colorado - Colorado

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 1 of 10

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 01-cv-01807-MSK-MJW BANK ONE, COLORADO, N.A. and, BANK ONE TRUST COMPANY, N.A., As Trustee of the Frank G. Jamison Marital Trust and the Frank G. Jamison Family Trust, Plaintiffs, v. C.V.Y. CORPORATION, d/b/a Your Valet Cleaners; and, JOHNNY ON THE SPOT, INC. Defendants.

BOULDER CLEANERS, INC. and, JOHN'S CLEANER'S, INC., Cross-Plaintiffs, v. C.V.Y. CORPORATION, d/b/a Your Valet Cleaners, Cross-Defendant. ______________________________________________________________________________ CVY'S AND JOHNNY ON THE SPOT'S MOTION FOR RECONSIDERATION OF PRIOR ORDERS (NOS. 381 AND 458) BASED ON RECENT U.S. SUPREME COURT AUTHORITY ______________________________________________________________________________ COME NOW C.V.Y. Corporation, d/b/a Your Valet Cleaners, and Johnny on the Spot, Inc. ("Defendants") by and through their counsel, Montgomery, Kolodny, Amatuzio & Dusbabek, L.L.P., and based upon the June 11, 2007 decision by the United States Supreme Court in U.S. v. Atlantic Research Corp., No. 06-562, 2007 WL 1661465 (U.S., June 11, 2007), which augments Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 125 S.Ct. 577 (2004), submit their Motion for Reconsideration of the following orders: (1) March 31, 2004

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 2 of 10

order dismissing CVY's indemnity counter claim against Bank One, N.A., Order No. 381; and (2) March 23, 2007 Order Denying Defendants' Motion for Leave to Assert Counterclaim For CERCLA 42 U.S.C. § 9613 Contribution Against Plaintiffs, Order No. 458. Defendants request that this Court reconsider these orders and allow Defendants to assert a CERCLA § 113 counter claim against Bank One, N.A. (as PRP defacto owner) and Bank One Trust (as PRP owner) and a contractual indemnity counter claim against Bank One, N.A., as follows: 1. Pursuant to D.C.COLO.LCivR 7.1(A), counsel for CVY and JOS have conferred

with counsel for Plaintiffs and are advised that they object to the relief requested herein. CrossPlaintiffs, Boulder Cleaners, Inc.'s and John's Cleaner's, Inc.'s, claims have been severed from this action and their claims will be tried separately at the conclusion of this matter. As such, counsel for Cross-Plaintiffs has not been consulted regarding this relief. PROCEDURAL BACKGROUND 2. To date, this case has proceeded on the premise, and this Court has entered

numerous orders stating, that Defendants can only be held liable for their proportionate share of clean up costs with respect to Bank One, N.A.'s CERCLA cost recovery action. 3.
1

On October 31, 2002, this Court issued an Order Approving Settlement between

Boulder Cleaners / John's Cleaners and Plaintiffs premised upon CERCLA § 113(f). At that time, Bank One, N.A. had asserted a CERCLA § 113(f) claim against all Defendants (including Boulder Cleaners, Inc. and John's Cleaner's, Inc.). This Court stated that "Plaintiffs' recovery against the Objectors shall be reduced by the Settling Defendants' proportionate share of fault..."
1

Order No. 196.

This Court approved contribution protection for the Settling

See, Order Nos. 196, 236, 260, 351, 381, 418, and 458.

2

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 3 of 10

Defendants. Over four years after this settlement and order, Bank One, N.A. withdrew its CERCLA § 113 claim against CVY and JOS. 4. On March 31, 2004, this Court dismissed Defendants' counter claim for

indemnity against Bank One, N.A. on the basis that this Court's prior orders provided that "CVY can only be held liable for its own actions, not the actions of others." Order No. 381. This was based, in part, on the then pending CERCLA § 113 claim that requires equitable considerations be taken into account in apportioning cleanup costs and Plaintiffs' settlement with Boulder Cleaners and John's Cleaner's pursuant to § 113(f). 5. On March 23, 2007 this Court denied "Defendants' Motion for Leave to Assert

Counterclaim for CERCLA 42 U.S.C. § 9613 Contribution Against Plaintiffs, Order #458," due to this Court's previous orders regarding equitable apportionment of costs. This Court ruled that Bank One, N.A.'s withdrawal of its CERCLA § 113 claim would not expose Defendants to any additional liability because "Bank One, through withdrawal of its contribution claim, cannot unilaterally expose CVY/JOS to additional liability given the extensive history of this case and the rulings that have flowed from the October 31, 2002 Order Approving Settlement." Order No. 458. U.S. SUPREME COURT DESCISIONS 6. On December 13, 2004, the United States Supreme Court issued its decision in

Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 125 S.Ct. 577 (2004). In Aviall, the Court held that a private party who has not been sued under CERCLA § 106 or § 107(a) was precluded from seeking contribution under CERCLA § 113(f)(1) from other potentially liable parties.

3

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 4 of 10

7.

Recently, on June 11, 2007, the United States Supreme Court issued its decision

in U.S. v. Atlantic Research Corp., No. 06-562, 2007 WL 1661465 (U.S., June 11, 2007). In Atlantic Research, the Court held, in relevant part: For similar reasons, a PRP could not avoid § 113(f)'s equitable distribution of reimbursement costs among PRPs by instead choosing to impose joint and several liability on another PRP in an action under § 107(a). The choice of remedies simply does not exist. In any event, a defendant PRP in such a § 107(a) suit could blunt any inequitable distribution of costs by filing a § 113(f) counterclaim. [Citations]. Resolution of a § 113(f) counter-claim would necessitate the equitable apportionment of costs among the liable parties, including the PRP that filed the § 107(a) action. 42 U.S.C. § 9613(f)(1) ("In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate"). Id. at *7. 8. In response to concerns that settlement under CERCLA § 113(f) would be

discouraged if settling parties remained liable under CERCLA §107, Atlantic Research stated that "a defendant PRP may trigger equitable apportionment by filing a § 113(f) counterclaim. A district court applying traditional rules of equity would undoubtedly consider any prior settlement as part of the liability calculus." Id. (emphasis added). PROCEDURAL POSTURE OF THIS CASE SUBSEQUENT TO ATLANTIC RESEARCH AND AVIALL 9. This Court has stated on several occasions that the pleadings may be conformed

to the evidence at trial. Given the combination of the Aviall and Atlantic Research decisions, Defendants believe that it would be more prudent to clarify the procedural posture of this case prior to trial in order to give some degree of certainty as to the available claims and defenses.

4

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 5 of 10

10.

At the time of the settlement between Plaintiffs and Boulder Cleaners, Inc. /

John's Cleaner's, Inc., the law was reasonably interpreted by this Court as permitting Bank One, N.A. to assert both a § 107 and § 113 claim. Until Aviall, these claims were commonly pled and treated in conjunction with one another, as was done in this litigation. Given these claims and the Court's interpretation of the same, the Settling Defendants have obtained contribution protection from this Court. Pursuant to § 113, the prior settlement reduces the potential liability of the other defendants. 11. However, there is an argument to be made after Aviall and Atlantic Research that

a court cannot take equitable factors into account in a CERCLA § 107 claim, which arguably provides for joint and several liability unless Defendants are permitted to assert a CERCLA § 113 counter claim. Plaintiffs have raised this argument on numerous occasions. 12. Aviall and Atlantic Research therefore suggest that the procedurally correct way

for a defendant in a CERCLA § 107 claim to "trigger" equitable apportionment is to pursue a claim under CERCLA § 113 against any potentially liable parties, including Plaintiffs. This procedural alignment of claims serves to reinforce this Court's prior orders regarding approval of the prior settlement and equitable apportionment, among all parties, which is the law of the case to date. 13. It is not Defendants intention to delay the trial date. In fact, Defendants are not

opposed to proceeding with the trial date as currently scheduled. The proposed counter claims will not require new or different evidence and will therefore not require additional discovery or preparation by counsel. If permitted, the parties will only be required to submit additional jury instructions, jury verdict form and/or special interrogatories.

5

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 6 of 10

ORDER DISMISSING DEFENDANTS' CERCLA § 113 COUNTER CLAIM 14. Aviall made clear that Bank One, N.A. could not maintain a CERCLA § 113

claim against Defendants and prompted Plaintiff to eventually withdraw that claim. 15. After it was clear that Bank One, N.A. would withdraw its CERCLA § 113 claim

and argue in favor of a joint and several liability scheme under § 107, Defendants sought to add a CERCLA § 113 counter claim in order to preserve the status quo. Prior to that time, Defendants did not need a separate CERCLA § 113 counter claim because Bank One, N.A.'s § 113 claim already required the Court's consideration of equitable factors in apportioning cleanup costs, including the liability of both Plaintiffs and the Settling Defendants. 16. Defendants do not contest the substance of this Court's previous orders providing

that CVY and JOS are only liable for their proportionate share of liability. However, in light of the recent U.S. Supreme Court decisions in Aviall and Atlantic Research, Defendants believe that allowing a CERCLA § 113 counter claim is both procedurally correct and necessary to preserve the spirit and effect of this Court's previous orders regarding proportionate liability. A CERCLA § 113 counter claim allows for equitable considerations to be taken into account and will permit the Court to look at all contributing parties and actions, including both Plaintiffs' and the Settling Defendants' conduct. This Court would then be free to apportion liability in accordance with previous orders and the law of the case.

6

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 7 of 10

ORDER DISMISSING DEFENDANTS' INDEMNITY COUNTER CLAIM 17. In this Court's March 31, 2004 Order, CVY's contractual indemnity claim was

dismissed on grounds that indemnity could not be sought from Bank One, N.A. because CVY could only be liable for its proportionate share of liability. Order No. 381. 18. Bank One, N.A. seeks a CERCLA §107 action against CVY and JOS and argues

that its own actions should not be considered since § 107 provides joint and several liability. Thus, even if Bank One, N.A.'s overall recovery is reduced by the Settling Defendants' proportionate share of CERCLA liability, Bank One, N.A. will argue that under CERCLA § 107 CVY should remain liable to Bank One, N.A. for the Bank's own misconduct and others. 19. as follows: 3.5 Party's Indemnification of Each Other. Except as provided herein, Tenant shall indemnify and save Landlord harmless from any all liabilities, damages or penalties and any costs, expenses or claims of any kind or nature arising out of any construction, alterations or additions or otherwise as incurred by Tenant, including Landlord's reasonable attorneys' fees. Such indemnification shall apply to damages or injury to person or property. Tenant shall have the same rights and remedies against Landlord with respect to construction, alterations or additions performed by Landlord pursuant to its duties and responsibilities. The evidence obtained through discovery demonstrates that Bank One, N.A. provided a defective drain in the premises leased to CVY, which contributed to the subject contamination of the property. Therefore, CVY should be entitled to argue indemnification from Bank One, N.A. for any portion of CERCLA damages which are attributable to Bank One, N.A. via providing a defective premises. In the July 3, 1989 Lease Agreement, Bank One, N.A. agreed to indemnify CVY,

7

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 8 of 10

20.

This Court's previous order did not address the possibility for contractual

indemnification against Bank One, N.A. for its own actions, since there was a then pending § 113 claim. Aviall and Atlantic Research appear to require defendants in a CERCLA § 107 claim to now make affirmative counter and/or cross claims in order to reduce liability. Accordingly, CVY should be able to seek reimbursement or contribution of any CERCLA § 107 damages owed to Bank One, N.A. through a counter claim for contractual indemnification in addition to a counterclaim under CERCLA § 113. CONCLUSION WHEREFORE, Defendants C.V.Y. Corporation, d/b/a Your Valet Cleaners, and Johnny on the Spot, Inc. request that this Honorable Court reconsider Order Nos. 381 and 458 and allow Defendants to assert a CERCLA § 113 counterclaim against Bank One, N.A. (as PRP defacto owner) and Bank One Trust (as PRP owner) and contractual indemnity against Bank One, N.A. DATED: June 22, 2007

8

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 9 of 10

Respectfully submitted, MONTGOMERY, KOLODNY, AMATUZIO & DUSBABEK, L.L.P.

By: s/ Max K. Jones, Jr._____________ C. Michael Montgomery Max K. Jones, Jr. Ryan C. Gill 1775 Sherman St., 21st Floor Denver, Colorado 80203 Phone: 303-592-6600 Fax: 303-592-6666 [email protected] [email protected] [email protected] ATTORNEYS FOR THE DEFENDANTS C.V.Y. CORPORATION, d/b/a YOUR VALET CLEANERS, and JOHNNY ON THE SPOT, INC.

9

Case 1:01-cv-01807-MSK-MJW

Document 474

Filed 06/22/2007

Page 10 of 10

CERTIFICATE OF MAILING I hereby certify that a true and correct copy of the CVY'S AND JOHNNY ON THE SPOT'S MOTION FOR RECONSIDERATION OF PRIOR ORDERS (NOS. 381 AND 458) BASED ON RECENT U.S. SUPREME COURT AUTHORITY was placed in the US Mail, first class postage prepaid, on June 22, 2007, addressed to the following:

Scott Jurdem, Esq. Buchanan Jurdem & Cederburg, P.C. 1621 18th Street, Suite 260 Denver, Colorado 80202 [email protected]

Laura J. Riese, Esq. Davis Graham & Stubbs LLP 1550 Seventeenth Street, Suite 500 Denver, Colorado 80202 [email protected]

s/ Karen Wood Karen Wood Montgomery, Kolodny, Amatuzio & Dusbabek 1775 Sherman Street, 21st Floor Denver, CO 80203 Telephone: 303-592-6600 Fax: 303-592-6666 [email protected]

10