Summary of a Recent
Judicial Development in
Environmental Law

Property Seller Breached Duty to Clean Up Waste,
Petroleum Contamination, and Trash

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Nature Conservancy v. Wilder Corp. of Delaware, No. 06-1096, 2009 WL 1492177 (C.D. Ill. May 28, 2009), the United States District Court for the Central District of Illinois held that a seller/lessee of a nature preserve had breached its duties under the sale/lease agreement by failing to clean up lagoons on the property pursuant to an Illinois Environmental Protection Agency (IEPA) directive, by failing to remediate petroleum contamination on the property, and by failing to clean up its trash and rubbish.

Background

The Nature Conservancy contracted to purchase 6,660 acres of land from the Wilder Corporation (Wilder) for use as a nature preserve and then lease the property back to Wilder. Id. at *1. Pursuant to the agreement, Wilder was responsible for cleanup of the property prior to closing, including removal of "all rubbish, trash, and hazardous or toxic chemical substances or materials, including petroleum." Id. The Nature Conservancy was later required to spend $274,888 to dispose of liquid and solid waste in and around sewage lagoons on the property that Wilder had failed to dispose of, despite orders from the IEPA to do so. Id. In addition, Wilder affirmatively represented to the Nature Conservancy that there were no underground petroleum storage tanks on the property, when in fact there were. Id. at *2. Wilder also agreed that at the end of the lease term, it would "clean up and properly dispose of any soil contaminated with diesel fuel, motor oil, herbicides/pesticides, or other agricultural chemicals, and any hazardous or toxic chemical substances or materials." Id. The Nature Conservancy later brought this action, claiming that Wilder was liable for breach of express warranties that there were no underground storage tanks on the property and for breach of contract for failure to fulfill its various obligations, and moved for summary judgment. Id.

Arguments

The Nature Conservancy argued that Wilder had failed to perform various obligations under the contract, including cleaning out the sewage lagoons, remediating petroleum contamination from both underground and above ground storage tanks, and "cleaning up trash, rubbish, and junk on the property." Id. at *3.

Wilder argued that it had no duty to clean out the lagoons and that it was not responsible for the petroleum contamination, but did not dispute the claim that it failed to remove rubbish and trash from the property. Id. at *4, *8, *12.

Analysis and Holdings

The court found that Wilder had a duty to clean out the sewage lagoons pursuant to a subsection of the contract that required Wilder to comply with directives of the IEPA. Id. at *4. Because the IEPA had issued a directive to Wilder regarding disposal of the liquid and solid waste in the lagoons, the court held that it was liable under the lease agreement for failure to comply. Id. at *6. The court further found no genuine issues of material fact in existence regarding petroleum contamination, because the Nature Conservancy had produced evidence that petroleum contamination existed and occurred during the lease term, while Wilder had failed to produce any real evidence contradicting that assertion; therefore, the court granted summary judgment for the Nature Conservancy on that issue as well. Id. at *8, *12. Finally, the contract specifically required Wilder to clean up rubbish and trash on the property, and it was undisputed that Wilder had failed to do so, so the court also granted summary judgment to the Nature Conservancy on that issue. Id. at *12.

The case was decided on May 28, 2009.