The movement and disposal of fill material from demolition sites tends not to be well-regulated. During the real estate bubble when demand for aggregate was at a premium, unsavory actors in the industry exploited the regulatory gaps. These companies would charge clients to dispose of contaminated fill, pocket the fees and then sell the materials to sites needing “clean fill”. This practice led to a number couple of high profile projects that were slated for redevelopment. It can be particularly frustrating to a brownfield developer to incur costs to remediate a site only to then have it re-contaminated from importing dirty fill.
A recent example of the problems with contaminated fill was Knoll v. MTS Trucking, Inc., 2011Minn. App. Unpub. LEXIS 767 (Minn. Ct. App., Aug. 15, 2011), Midwest Asphalt Corporation (Midwest) needed to dispose of asphalt millings and fill generated from road reconstruction project. The Minnesota Pollution Control Agency (MPCA) considered the excavated fill to be a regulated waste due because of the presence of asphalt in the soil.
The owner of MTS Trucking informed Midwest that Thomas Knoll was looking for fill material to prepare his property for potential development. MTS then deposited several thousand cubic yards of fill on Knoll’s property in 2003 and 2004.
In February 2005, a commercial development company agreed purchase Knoll’s property. During its pre-acquisition due diligence, the developer learned the filled areas of the property had elevated levels of diesel range organics (DROs). The developer refused to purchase the property at the price listed in the purchase agreement unless Knoll removed the impacted soil.
Knoll retained his own consultant who determined that 90% of the fill contained low-level DRO contamination along with some benzo(a)pyrene (BaP) equivalents. Knoll reported then enrolled in the state voluntary cleanup program to remove the contaminated soil at a cost of approximately $296K. After the state confirmed no further action was required, the developer the purchase the property.
In 2007, Knoll filed a complaint againstMidwest and MTS alleging negligence, misrepresentation, common-law trespass along with a cost recovery under the state superfund law (MERLA). Knoll alleged that MTS andMidwest misrepresented to him that the fill deposited on his property was clean, and that the fill was the cause of the contamination on his property.
The defendants filed a motion for summary judgment on the grounds that the common law claims were barred by the statute of limitations. The trial court ruled that since the fill intended to improve Knoll’s property, the two-year statute of limitations applied. Since Knoll served his complaint more than two years after learning of the contamination, the court ruled the common-law claims were time-barred.
The case then proceeded to a jury trial on the sole issue of whether respondents were liable under MERLA claim. The jury found that the contamination derived from petroleum. As a result, the court ruled contamination was not a hazardous substance because it fell within the MERLA petroleum exclusion. Thus, the district court dismissed Knoll’s MERLA claim.
On appeal, Knoll argued that the six-year statute of limitation should apply since the fill material constituted a trespass. The appeals court said that the longer period applied to invasions of possessory interests and that despite the contaminated soil, Knoll still enjoyed the exclusive right to possession of his property. Indeed, the court said while the developer initially declined to purchase the property at the price agreed upon in the purchase agreement, the record indicated that the developer would have purchased the property with the contaminated soil for a lesser price. The fact that Knoll could have sold the property at a lesser price despite the alleged contaminated soil demonstrates that the alleged injury was the physical injury to his property in the form of defective fill material.
Knoll also argued the presence of the fill constituted a continuing trespass that should have tolled the statute of limitation. However, the court said under Minnesota law, a continuing trespass applied to a continuing or reoccurring wrongful act. Here, the court said, the wrong complained of was the act of depositing contaminated soil instead of clean fill on Knoll’s property. Once the fill was deposited, the alleged trespass ended and there was no reoccurring intrusion. Therefore, the court concluded that the alleged trespass was permanent rather than continuous, and the district court properly concluded that Knoll’s trespass claim was barred by the two-year statute of limitations. The Minnesota Supreme Court recently declined to hear the case.