Olin Corporation v. P.H. Glatfelter Company

Filing 920100305

UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 08-2252

OLIN CORPORATION, Plaintiff - Appellee, v. P.H. GLATFELTER COMPANY, a/k/a Glatfelter, d/b/a Glatfelter Company, Defendant - Appellant.

Appeal from the United States District Court for the Western District of North Carolina, at Asheville. Lacy H. Thornburg, District Judge. (1:06-cv-00367-LHT)

Argued:

December 2, 2009

Decided:

March 5, 2010

Before TRAXLER, Judges.

Chief

Judge,

and

SHEDD

and

DAVIS,

Circuit

Affirmed by unpublished per curiam opinion.

ARGUED: Adam Howard Charnes, KILPATRICK & STOCKTON, LLP, Winston-Salem, North Carolina, for Appellant. Craig C. Martin, JENNER & BLOCK, Chicago, Illinois, for Appellee. ON BRIEF: Betsy Cooke, Stephen R. Berlin, KILPATRICK & STOCKTON, LLP, Raleigh, North Carolina, for Appellant. Philip S. Anderson, LONG, PARKER, WARREN, ANDERSON & PAYNE, PA, Asheville, North Carolina; Barry Levenstam, Amanda S. Amert, Melissa L. Dickey, JENNER & BLOCK, Chicago, Illinois, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM: This appeal arises from a declaratory judgment/breach of contract action with respect to a contractual indemnity

provision. We affirm. Appellee Olin Corporation ("Olin") purchased the Ecusta

Paper Mill in Pisgah Forest, North Carolina in 1949. Over the years thereafter, which both Olin disposed from and in of waste of products its that containing

mercury, processes,

resulted on-site

certain

manufacturing flowed onto

wastewater

nearby property. In 1973, the Environmental Protection Agency pressed regulatory actions intended to require Olin to address and/or reduce its discharge of mercury. In part as a result, Olin ceased the extant manufacturing processes and substituted purchased chemicals. In including 1985, Garza senior officers of Olin's Robert Ecusta Division, Jr.

Baldwin

(President),

Cunningham,

(Chief Legal Officer and Vice President of Human Resources and Public Affairs), and Robert Gussman (Environmental Director),

together with several investors, purchased the Ecusta Mill from Olin, forming Ecusta Corporation. Olin acquired an interest in the newly-formed entity but did not and involve Gussman in itself in

operations. substantially

Baldwin, the same

Cunningham, leadership

assumed Ecusta

positions

Corporation as they had held in the Ecusta Division of Olin. In 3

1987, Appellant P.H. Glatfelter Company ("Glatfelter") acquired the Ecusta Corporation through a stock purchase transaction, in which Glatfelter assumed certain of Ecusta in the Corporation's business and and same

liabilities. served Gussman on

Baldwin

remained Board as

involved of well,

Glatfelter's

Directors. and

Cunningham in the

remained

involved

served

capacities in which they served for Ecusta Division and Ecusta Corporation. The contractual rights and obligations of Olin and

Glatfelter are governed by a July 24, 1985, Purchase Agreement ("the Agreement"). The Agreement provides that Glatfelter (as successor-in-interest to Ecusta Corporation) must indemnify Olin for certain environmental As constituent liabilities parts of under the prescribed the

circumstances.

Agreement,

representations and warranties of Olin's officers, and the socalled Olin's Environmental obligations in Disclosure divulging Statement the ("EDS") of underscore mercury at

existence

Ecusta Mill to Glatfelter. (The mill property has changed hands several times in the last decade.) On or about January 23, 2006, the North Carolina Department of Environment and Natural Resources ("NCDENR") notified Olin and Glatfelter (among others) that it planned to take action concerning Ecusta Mill under the Comprehensive Environmental

Response, Compensation, and Liability Act, 42 U.S.C. § 9601, et 4

seq. ("CERCLA"). The NCDENR notice identified five Recognized Environmental Concerns ("RECs") at Ecusta Mill that would

require clean-up. Pursuant to the Agreement, Glatfelter agreed to indemnify Olin with respect to four of the five RECs. It refused to indemnify Olin for the costs related to remediation of mercury contamination released from the Ecusta Mill's

Electro-Chemical Building. Thereafter, District Court Olin for sued Glatfelter in the of United North States

the

Western

District

Carolina.

After several preliminary matters had been attended to by the court and the completion of discovery, Olin moved for summary judgment. The district court issued a carefully-reasoned memorandum opinion in which it granted summary judgment to Olin. Olin Corp. v. P.H. Glatfelter Oct. 14, Co., 2008). No. The 1:06CV367, court first 2008 WL 4596262, inter

(W.D.N.C.

determined,

alia, that, as to Olin's request for a declaratory judgment, the EDS specifically and unambiguously "refer[red]" to the

"disposition" of mercury. Id. at *6-8.

Moreover, "the Agreement

with its accompanying EDS obligated [Glatfelter] to indemnify Olin for the costs of cleanup described in RECs 1 and 5." at *8-10. Second, the district for court determined Id. that

Glatfelter's

counterclaims

fraud,

negligent

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misrepresentation, and unfair and deceptive trade practices were time-barred. Id. at *10-11.

Glatfelter noted its timely appeal to this court. We review the district court's grant of summary judgment de novo. Meson

v. GATX Tech. Servs. Corp., 507 F.3d 803, 806 (4th Cir. 2007) (citation omitted). Summary judgment is proper only where "there is no genuine issue as to any material fact" and the moving party is "entitled to judgment as a matter of law." Id.

(citation omitted). By its in terms, the Agreement with, the would laws "be of governed the State by, of and New

construed York."

accordance

(J.A. 688). We discern no error by the district court in

its summary judgment order. First, "[i]t is the primary rule of construction of

contracts . . . that when the terms of a written contract are clear and unambiguous, the intent of the parties must be found therein." Mazzola v. County of Suffolk, 533 N.Y.S.2d 297, 297

(N.Y. App. Div. 1988) (internal quotation marks and citation omitted). "The words and phrases used in an agreement must be

given their plain meaning so as to define the rights of the parties." Id. (citation omitted). Here, the terms "referred

to" and "disposition" have plain and unambiguous meanings, and the disposition of mercury is referred to throughout the EDS.

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Second, under New York's policy of strict interpretation of indemnification clauses, a court must examine whether

Glatfelter's intention to indemnify "can be clearly implied from the language and purpose of the entire agreement and the

surrounding facts and circumstances." Hooper Assocs., Ltd. v. AGS Computers, Inc., 74 N.Y.2d 487, 491-92 (1989). That test is satisfied here. For example, Baldwin, Cunningham, and Gussman were aware of issues regarding Ecusta Mill's mercury

contamination. Accordingly, their subsequent employers, Ecusta Corporation and then Glatfelter, of which they were high-ranking officers, are charged with such knowledge and thus also were aware that the EDS "referred to" the disposition of mercury. J.A. 2642-43. Accordingly, Glatfelter was on notice of the

mercury disposal. Corp., 850

Cf. United States v. Hooker Chems. & Plastics 993, 1059 (W.D.N.Y. 1994) (noting that

F.Supp.

"[e]ven for latent defects, the seller's duty terminated when a new owner discovered or should reasonably have discovered and had a reasonable opportunity to abate the condition"). Third, under North Carolina law, Glatfelter's tort

counterclaims are time-barred because it reasonably should have been aware of the disposition of the mercury years before it decided to bring its claims. See, e.g., Sullivan v. Mebane

Packaging Group, Inc., 158 N.C. App. 19, 28 (2003) (noting that we have held that knowledge of information should be imputed to 7

investors

who

possess

documents

apprising

them

of

the

risks

associated with the investments). In sum, upon our careful consideration of the record,

briefs, oral argument by the parties, and applicable law, we affirm on the basis of the opinion of the district court. Olin Corp. v. P.H. Glatfelter Co., No. 1:06CV367, 2008 WL 4596262, (W.D.N.C. Oct. 14, 2008). AFFIRMED

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