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Ilco Site Remediation Group v. Taracorp, Inc.

United States District Court, N.D. Georgia, Atlanta Division

October 1, 2014



WILLIAM S. DUFFEY, Jr., District Judge.

This matter is before the Court on Plaintiff's Motion to Voluntarily Dismiss Counts 1, 2, and 3 of Plaintiff's Complaint (the "Voluntary Dismissal Motion") [94] and Plaintiff's Motion for Entry of Judgment [95].


Plaintiff is an unincorporated association of twenty-three (23) companies that are potentially responsible parties ("PRPs") for the costs of remediation and removal of environmentally hazardous substances at a Superfund Site in Leeds, Alabama, and related disposal locations (the "Site"). Defendant NK Holdings, LLC[1] is a PRP for the Site and used to be a member of the ILCO Group until it was removed for refusing to pay its clean-up allocation.

The PRPs entered into an agreement regarding clean up of the site after first entering into a Consent Order with the United States Environmental Protection Agency ("EPA") (the "Consent Order") in the action the EPA filed under Sections 101 and 107 of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for reimbursement of costs incurred for environmental response actions taken at the Site. The agreement was entered into in October 1997, and was titled "The ILCO Site Remediation Agreement" ("Agreement"). Defendant's Chief Financial Officer signed the Agreement on Defendant's behalf. The Agreement sets forth procedures for performing the Remedial Design/Remedial Action ("Remedial Work Plan") to which the PRPs agreed in the Consent Order. The Agreement also allocated among the PRPs, the costs associated with the Remedial Work Plan. For about ten years, Defendant paid the pro rata amount assessed against it under the Agreement. During this decade long period, Defendant did not object to its obligation to pay the assessments, the nature of the amount assessed or the allocation of its share of responsibility for the Remedial Work Plan.

That changed. On December 22, 2008, Louis J. Taratoot, the owner of NK Holdings LLC, wrote a letter to Plaintiff's counsel in which he discussed the allocations his company owed:

I have delayed responding to you in the hopes that [NK Holdings LLC] would be able to pay its $30, 199.28 assessment by the end of the year. Unfortunately, with the current state of the economy, [NK Holdings LLC] simply does not have sufficient cash flow to pay even a portion of the assessment at this time.
Please be assured, however, that [NK Holdings LLC] wishes to continue to participate in the [ILCO Group] but must request that the payment of this assessment be deferred until such time as [NK Holdings LLC] has sufficient cash to pay the assessment in whole or in installments.

Defendant failed to send any of its further allocations, which led to this litigation when, on January 24, 2012, Plaintiff filed its complaint.[2] The Complaint contained six counts all centered on Defendant's refusal to pay its share of remedial expenses to which it agreed under the Consent Order and Agreement. The Complaint sought cost recovery and contribution pursuant to CERCLA, a declaratory judgment against Defendant for its liability to pay existing and future costs associated with the Remedial Work Plan, breach of contract damages in excess of $119, 699.18, and attorneys fees.

On August 7, 2013, Plaintiff moved for partial summary judgment on its breach of contract claim, seeking damages, then in the amount of $267, 480.36, plus interest for unpaid assessments owed from December 2008 through 2013, and a declaration that Defendant is responsible for paying its share of all future amounts assessed pursuant to the Agreement.[3] On November 18, 2013, Defendant finally replied to Plaintiff's Partial Motion for Summary Judgment.[4]

On November 25, 2013, Defendant moved for summary judgment on the Plaintiff's CERCLA claim and itself sought summary judgment on Plaintiff's breach of contract claim. Recognizing that the Parties' dispute centered on Defendant's contract obligation and in an effort to focus the litigation on the breach of contract dispute, the Court, on April 16, 2014, convened a telephone conference to discuss the pending motions and the status of the case. During the conference, the Court observed that because the Parties had filed competing motions for summary judgment on Plaintiff's breach of contract claim, a decision on the contract dispute issues might resolve the litigation. The Court suggested the parties focus on the breach of contract claim and suggested withholding further briefing on Defendant's motion for summary judgment on Plaintiff's claim under CERCLA.

A consensus thus was reached during the April 16, 2014, telephone conference to focus all summary judgment briefing on Plaintiff's breach of contract claim:

Court:... I know there are CERCLA claims, which I think is the underlying basis by which the contract was entered into, that a decision on the contract dispute, which simply is the mechanism by which the parties agreed to meet their CERCLA consent decree obligations that the parties will have a full idea of what their obligations are, which is why I think it makes sense to first deal with the breach of contract issue.

The Court noted that if the Court's decision on the breach of contract claim did not resolve the action, the Court would require Plaintiff to respond to Defendant's summary judgment motion on Plaintiff's CERCLA claims within thirty (30) days of the Court's ruling on Plaintiff's Motion for Partial Summary Judgment. Counsel for the Defendant, when presented with this reasoning and plan to focus on the ...

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