Lewis et al v. Kinder Morgan Energy Partners LP et al

Filing 99

ORDER denying Defendants' 91 Motion for Partial Summary Judgment or, alternatively for a bifurcated trial. Signed by Honorable Henry M Herlong, Jr on 4/28/17.(kmca)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ANDERSON DIVISION
Eric M. Lewis and Scott Lewis,
Plaintiffs,
vs.
Kinder Morgan Energy Partners, L.P.;
Kinder Morgan Management, LLC;
Kinder Morgan, Inc.; Kinder Morgan
G.P., Inc.; and Plantation Pipe Line
Company, Inc.,
Defendants.

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C.A. No. 8:15-4792-HMH
OPINION & ORDER

This matter is before the court on Defendants Kinder Morgan Energy Partners, L.P.,
Kinder Morgan Management, LLC, Kinder Morgan, Inc., Kinder Morgan G.P., Inc. (collectively
“Kinder Morgan”) and Plantation Pipe Line Company, Inc.’s (“PPL”) motion for partial
summary judgment or, alternatively for a bifurcated trial. After consideration, the court denies
the Defendants’ motion.
I. FACTUAL AND PROCEDURAL BACKGROUND
This is an action arising out of a petroleum leak from an underground pipeline
(“Pipeline”) on Plaintiffs Eric and Scott Lewis’ property, which is located in Anderson County,
South Carolina near Belton, South Carolina (“Property”). PPL owns and operates the 3,100
mile pipeline that originates in Louisiana and ends in Washington, D.C. (Defs. Mem. Supp.
Partial Summ. J. 2, ECF No. 91-1.) Kinder Morgan’s pipeline network is over 84,000 miles of
pipeline. (Compl. ¶ 2, ECF No. 1-1.) PPL is owned and operated by Kinder Morgan. (Id. ¶ 7,
ECF No. 1-1.) The Pipeline is located on the Defendants’ easement on the Property. (Defs.
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Mem. Supp. Partial Summ. J. 6, ECF No. 91-1.) In December 2014, a leak caused by the failure
of a patch over a dent was discovered on a section of the Pipeline located on the Property. (Id. at
2, ECF No. 91-1.) The leak resulted in a discharge of an estimated 369,000 gallons of
petroleum. (Id., ECF No. 91-1.) The Pipeline leak was repaired within a few days of
discovering the leak and remediation efforts commenced. (Id., ECF No. 91-1.)
The Plaintiffs instituted this action on November 5, 2015, in state court alleging claims
for negligence, trespass, punitive damages, and injunctive relief. The Plaintiffs allege that the
petroleum leak has permanently impaired the Property. The Defendants removed the case to this
court.
On March 30, 2017, the Defendants filed the instant motion requesting that the court:
(1) dismiss Plaintiffs’ claims to the extent they relate to the 1990 dent repair [based
on the 13-year statute of repose set forth in S.C. Code § 15-3-640]; (2) dismiss
Plaintiffs’ claim for punitive damages or, alternatively, order that the trial in this
case be bifurcated for purposes of liability and damages; and (3) limit Plaintiffs’
recovery to the depreciation in the rental or usable value of the Lewis Property
caused by the petroleum impacts to the Lewis Property.
(Mot. Partial Summ. J., ECF No. 91.) The Plaintiffs filed a response in opposition on April 13,
2017. (Resp. Opp’n Mot. Partial Summ. J., ECF No. 93.) On April 25, 2017, the Defendants
replied. (Reply, ECF No. 98.) This matter is now ripe for consideration.
II. DISCUSSION OF THE LAW
A. Partial Summary Judgment Standard
Partial summary judgment “is merely a pretrial adjudication that certain issues shall be
deemed established for the trial of the case.” Fed. R. Civ. P. 56 advisory committee’s note
(1946). A motion for partial summary judgment is judged by the same standard as a full motion
for summary judgment. In re Boston Sci. Corp., Pelvic Repair Sys. Prods. Liab. Litig.,
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No. 2:12-cv-00904, 2015 WL 1527678, at *1 (S.D. W. Va. Apr. 2, 2015) (unpublished).
Summary judgment is appropriate only “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). In deciding whether a genuine issue of material fact exists, the evidence of the nonmoving party is to be believed and all justifiable inferences must be drawn in his favor. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, “[o]nly disputes over
facts that might affect the outcome of the suit under the governing law will properly preclude the
entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be
counted.” Id. at 248.
A litigant “cannot create a genuine issue of material fact through mere speculation or the
building of one inference upon another.” Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985).
“Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, disposition by summary judgment is appropriate.” Monahan v. Cty. of
Chesterfield, 95 F.3d 1263, 1265 (4th Cir. 1996). “[T]he mere existence of some alleged factual
dispute between the parties will not defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of material fact.” Ballenger v. N.C.
Agric. Extension Serv., 815 F.2d 1001, 1005 (4th Cir. 1987).
B. Discussion of the Law
1. 1990 Dent Repair Claims
The Defendants argue that the Plaintiffs’ claims that the Defendants were negligent with
respect to the 1990 dent repair are barred by the 13-year statute of repose set forth in S.C. Code

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Ann. § 15-3-640.1 (Defs. Mem. Opp’n Mot. Partial Summ. J. 4, ECF No. 91-1.) Section 15-3640 provides in pertinent part:
[n]o actions to recover damages based upon or arising out of the defective or
unsafe condition of an improvement to real property may be brought more than
thirteen years after substantial completion of the improvement. For purposes of
this section, an action based upon or arising out of the defective or unsafe condition
of an improvement to real property includes:
(1) an action to recover damages for breach of a contract to construct or repair an
improvement to real property;
(2) an action to recover damages for the negligent construction or repair of an
improvement to real property;
(3) an action to recover damages for personal injury, death, or damage to property;
(4) an action to recover damages for economic or monetary loss;
(5) an action in contract or in tort or otherwise;
(6) an action for contribution or indemnification for damages sustained on account
of an action described in this subdivision;
(7) an action against a surety or guarantor of a defendant described in this section;
(8) an action brought against any current or prior owner of the real property or
improvement, or against any other person having a current or prior interest in the
real property or improvement;
(9) an action against owners or manufacturers of components, or against any person
furnishing materials, or against any person who develops real property, or who
performs or furnishes the design, plans, specifications, surveying, planning,
supervision, testing, or observation of construction, or construction of an
improvement to real property, or a repair to an improvement to real property.
This section describes an outside limitation of eight years after the substantial
completion of the improvement, within which normal statutes of limitations
continue to run.

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“Section 15-3-640 was amended in 2005 and now contains an outside limitation of
eight years in which to file suit.” Capco of Summerville, Inc. v. J.H. Gayle Const. Co., 628
S.E.2d 38, 41 n.1 (S.C. 2006). The 2005 amendment substituted “eight years” for “thirteen
years” and made nonsubstantive language changes with the exception of adding a paragraph
relating to a certificate of occupancy as proof of substantial completion of an improvement
project. The Defendants do not dispute that the pre-amendment version of the statute governs
the legal issues in this case. Further, the 2005 amendment only applies to “improvements to real
property for which certificates of occupancy are issued by a county or municipality or
completion of a final inspection by the responsible local building official after the effective
date” of July 1, 2005. 2005 South Carolina Laws Act 27 (H.B. 3008).
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S.C. Code Ann. § 15-3-640 (2005).
The South Carolina Supreme Court has found that a pipeline “is an improvement to the
real property under which it lies for purposes of § 15-3-640.” S.C. Pipeline Corp. v. Lone Star
Steel Co., 546 S.E.2d 654, 656 (S.C. 2001). The court held that the pipeline was an
“improvement to real property” because it “unquestionably made the easement more valuable to
[the plaintiff pipeline company]; it involved the investment of labor and money; and it was
permanent as that phrase is commonly understood–it had been in place for 38 years when the
explosion occurred.” Id. at 657 (internal footnote omitted). Further, in South Carolina Pipeline,
the court held that an “easement is real property.” Id. at 656. However, the inquiry does not end
here. There is no question that the Pipeline is an improvement which made the Defendants’
easement more valuable, but the issue remains whether section 15-3-640 applies to the case at
bar.
The Plaintiffs submit that the limitations set forth in S.C. Code Ann. § 15-3-670(A) bar
application of section 15-3-640 to this case. (Resp. Opp’n Mot. Partial Summ. J. 5, ECF No.
93.) S.C. Code Ann. § 15-3-670(A) provides that
[t]he limitation provided by Sections 15-3-640 through 15-3-660 may not be
asserted as a defense by a person in actual possession or control, as owner, tenant,
or otherwise, of the improvement at the time the defective or unsafe condition
constitutes the proximate cause of the injury or death for which it is proposed to
bring an action, in the event the person in actual possession or control knows, or
reasonably should have known, of the defective or unsafe condition.
The parties do not cite to any case law interpreting the limited ownership exception in section
15-3-670(A). The South Carolina Court of Appeals has directly addressed this issue in an
unpublished decision, Bundrick v. East Richland County Public Service District, No. 2005-UP225, 2005 WL 7083866, at *3 (S.C. Ct. App. Mar. 31, 2005) (per curiam) (unpublished).
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Although Bundrick is an unpublished opinion with no precedential value, the court finds that this
case has persuasive value as it is factually analogous to the case at bar and involves interpretation
of the ownership exception in section 15-3-670(A). In Bundrick, the plaintiffs owned real
property and the defendant owned an easement running through the property for a sewer line.
2005 WL 7083866, at *1. After building a house on the property in 1986, the plaintiffs
experienced soil erosion and structural problems with the house. Id. The plaintiffs alleged that
an aluminum pipe running near the sewer line had caused these problems. Id. The South
Carolina Court of Appeals held as follows:
There is no dispute the District owns the easement, which is real property. The
District acknowledges its ownership of the sewer lines. However, the District
presented evidence at trial that denied it or its contractors installed or owned the
aluminum pipe.
It is the aluminum pipe that is the “improvement” alleged to have caused the
Bundricks’ damages. Therefore, it is the ownership of the defective aluminum pipe
that would trigger the section 15-3-670 exception. Only if the District owned the
aluminum pipe would it be barred from asserting the statute of repose as a defense.
In finding against the Bundricks, the master rejected their argument that the District
owned the aluminum pipe, which they allege was the culprit. There is evidence in
the record to support the master’s conclusion that the District did not own the
defective aluminum pipe. Accordingly, the District is not barred by section 15-3670 from asserting the statute of repose as a defense.
Id. at *3. In addition, the preamble to the 1986 Act revising section 15-3-640 states:
Whereas, the General Assembly finds it reasonable and necessary to distinguish
between a person in actual possession or control of an improvement to real
property and those otherwise involved in an improvement to real property, for the
following reasons: because acceptance of some future responsibility for the
condition of the premises is implied in the acceptance of an improvement to real
property; because possession or control of the premises is a reasonable and fair
basis for imposing some additional liability; because after the date of acceptance of
the work by the owner, there exists the possibility of neglect, abuse, poor
maintenance, mishandling, improper modification, or unskilled repair of an

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improvement; because owners and persons in control have the opportunity to avoid
liability by taking care of the improvement and by regulating its use . . . .
Snavely v. Perpetual Fed. Sav. Bank, 412 S.E.2d 382, 384-85 (S.C. 1991) (quoting Act No. 412
of 1986).
In the case at bar, the Defendants own the easement containing the Pipeline that runs
through a portion of the Plaintiffs’ Property. (Defs. Mem. Supp. Partial Summ. J. 6, ECF
No. 91-1.) Further, unlike in Bundrick, it is undisputed that the Defendants own the Pipeline,
which is the improvement. (Id. at 2, ECF No. 91-1.); 546 S.E.2d at 656. As owner of the
Pipeline, it is within the complete control of the Defendants and the Defendants are solely
responsible for the maintenance and management of the Pipeline. The Defendants own the
Pipeline and the easement where the Pipeline is located, and the Plaintiffs submit that the
Defendants have damaged their property because the Pipeline has been repaired, managed, and
maintained in a defective and unsafe condition.
Specifically, in pertinent part, the Plaintiffs’ expert, Richard B. Kuprewicz
(“Kuprewicz”), opines in his expert report that the 1990 sleeve repair “was performed negligently
and deficiently.” (Resp. Opp’n Mot. Partial Summ. J. Ex. 1 (Kuprewicz Report ¶ 1a), ECF No.
93-1.) Kuprewicz states that PPL was “negligent in failing to perform further inspections and
analysis, including field inspection of the 1990 sleeve repair, prior to its December 8, 2014
failure at Lewis Farm.” (Id. Ex. 1 (Kuprewicz Report ¶ 1c), ECF No. 93-1.) Further, Kuprewicz
states that Kinder Morgan failed to conduct due diligence and “comply with integrity
management regulations concerning previous repairs . . . that should have raised concerns within
the company about the adequacy of many previous threats and their sleeve repairs on the

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Plantation Pipeline” when it acquired controlling interest of PPL in 1999. (Id. Ex. 1 (Kuprewicz
Report ¶ 2), ECF No. 93-1.)
The Defendants contend that the “Plaintiffs have not produced any evidence from which a
jury could conclude that Defendants knew, or should have known, about the alleged defective
repair that was conducted in 1990 prior to the release in 2014.” (Reply 3, ECF No. 98.) The
court disagrees. The Plaintiffs have adequately come forward with evidence at the summary
judgment stage to raise a genuine issue of material fact regarding whether the Defendants knew
or should have known of the alleged defective and unsafe condition of the Pipeline with respect
to the 1990 dent repair. Based on the foregoing, section 15-3-670(A) prevents the Defendants
from asserting the statute of repose set forth in section 15-3-640 as a defense with respect to the
1990 Dent Repair. Therefore, the Defendants’ motion for partial summary judgment is denied on
this claim.2
B. Punitive Damages
The Defendants allege that the Plaintiffs cannot show any evidence of punitive damages
by clear and convincing evidence in this case. (Defs. Mem. Supp. Partial Summ. J. 7, ECF
No. 91-1.)
In order for a plaintiff to recover punitive damages, there must be evidence the
defendant’s conduct was willful, wanton, or in reckless disregard of the plaintiff’s
rights. A tort is characterized as reckless, willful or wanton if it was committed in
such a manner or under such circumstances that a person of ordinary reason and
prudence would have been conscious of it as an invasion of the plaintiff’s rights.
A conscious failure to exercise due care constitutes willfulness. The plaintiff has
the burden of proving punitive damages by clear and convincing evidence.

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The court declines to address the Plaintiffs’ remaining arguments in opposition to the
Defendants’ motion for partial summary judgment based on the statute of repose.
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Taylor v. Medenica, 479 S.E.2d 35, 46 (1996) (internal citations omitted); S.C. Code Ann. § 1533-135. Clear and convincing evidence is regarded as “evidence . . . of such weight that it
produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the
truth of the allegations sought to be established, and, as well, as evidence that proves the facts at
issue to be highly probable.” Jimenez v. DaimlerChrysler Corp., 269 F.3d 439, 450 (4th Cir.
2001) (quotations and citations omitted).
Viewing the facts in the light most favorable to the Plaintiffs, there is sufficient evidence
on which a jury could find that the Defendants acted willfully, wantonly, or recklessly with
respect to the 1990 sleeve repair and maintenance and management of the Pipeline. Therefore, as
to punitive damages, summary judgment is denied.
In the alternative, the Defendants request that the court bifurcate the trial into two phases,
one for liability and one for damages. (Defs. Mem. Supp. Partial Summ. J. 9, ECF No. 91-1.)
Rule 42(b) of the Federal Rules of Civil Procedure provides “[f]or convenience, to avoid
prejudice, or to expedite and economize, the court may order a separate trial of one or more
separate issues . . . .” In exercising its powers under Rule 42(b), the district court is permitted
“considerable discretion” and “the exercise of that discretion will be set aside only if clearly
abused.” Sentry Select Ins. Co. v. Guess Farm Equip., Inc., Civil Action No. 5:12-03504-JMC,
2013 WL 5797742, at *4 (D.S.C. Oct. 25, 2013) (unpublished) (citing Dixon v. CSX Transp.,
Inc., 990 F.2d 1440, 1443 (4th Cir. 1993)). “Notwithstanding the broad discretion conferred by
Rule 42(b), the party requesting separate trials bears the burden of convincing the court that such
an exercise of its discretion will (1) promote greater convenience to the parties, witnesses, jurors,
and the court, (2) be conducive to expedition and economy, and (3) not result in undue prejudice

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to any party.” Id. After review of the record, none of these factors support bifurcation in this
case. Thus, the Defendants’ motion to bifurcate is denied.
C. Temporary Damage to Property
The Defendants argue that the Plaintiffs have only suffered temporary damages to the
Property as a matter of law, and therefore, the Plaintiffs are only entitled to recover damages for
loss of use during the time period that the Property remains damaged. (Defs. Mem. Supp. Partial
Summ. J. 11, ECF No. 91-1.) In Yadkin Brick Co., Inc. v. Materials Recovery Co., the South
Carolina Court of Appeals held that the plaintiff failed to establish permanent injury from
environmental contamination where there was no expert testimony “that the property could not
be adequately cleaned up or that the contamination would result in permanent injury. . . .” 529
S.E.2d 764, 767-68 (S.C. Ct. App. 2000). The plaintiff in Yadkin had sought to recover damages
for diminution of property value due to environmental contamination of the plaintiff’s property.
Id. at 767.
In the case at bar, there is conflicting testimony regarding the duration of the clean up of
the Property and therefore there is a question of fact “as to whether damages should be
categorized as permanent or temporary.” AVX Corp. v. Horry Land Co., Inc., 686 F. Supp. 2d
621, 626 (D.S.C. 2010) (denying motion for summary judgment on issue of temporary damages
in a case involving ongoing remediation where there was conflicting evidence regarding whether
the property could ever be cleaned up). In AVX Corp., the plaintiff’s expert alleged that the
property could be cleaned up in five years and the defendant’s expert alleged that it was “not
possible to determine a fixed time period in which the contamination” could be cleaned up. Id.

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In the instant case, the Plaintiffs’ expert, David L. Hargett, Ph.D (“Dr. Hargett”), has indicated in
his expert report that the contamination from the pipeline leak is “likely to continue indefinitely
into the future.” (Resp. Opp’n Mot. Partial Summ. J. Ex. 9 (Hargett Report ¶ 27), ECF No. 939.) Dr. Hargett’s report states as follows:
My review of this case and this site includes review of the proposed Corrective
Action Plan . . . dated September 1, 2016. Based upon my review of the
information submitted to me, and my knowledge and experience, as well as the
huge amount of product reportedly released and the huge amount of product still
unaccounted for, it is most likely that significant levels of hazardous COCs will
persist on the Lewis property indefinitely into the future, and for an indefinite
period of time. These hazardous constituents adversely affect the soil, groundwater
and surface water on the Lewis property, and the vapor conditions adversely affect
air quality.
(Id. Ex. 9 (Hargett Report ¶ 26), ECF No. 93-9.) In contrast, the Defendants’ expert, Thomas
Hutton, opines that remediation will be achieved “within approximately 10 years.” (Defs. Mem.
Supp. Partial Summ. J. Ex. B (Hutton Opinions), ECF No. 91-3.) The spill in this case was a
large release of approximately 369,000 gallons of petroleum. The Defendants have only
recaptured approximately 215,000 gallons to date. (Resp. Opp’n Mot. Partial Summ. J. Ex. 7
(Jan. 2017 Status Update), ECF No. 93-7.) Thus, significant contaminants remain on the
Plaintiffs’ property. After review of the record in this case, genuine issues of material fact exist
regarding whether the contamination is temporary or permanent. Therefore, the Defendants’
motion for summary judgment on this issue is denied.

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It is therefore
ORDERED that the Defendants’ motion for partial summary judgment or, alternatively
for a bifurcated trial, docket number 91, is denied.
IT IS SO ORDERED.
s/Henry M. Herlong, Jr.
Senior United States District Judge
Greenville, South Carolina
April 28, 2017

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