Opinion
No. COA06-1016.
Filed 2 October 2007.
1. Environmental Law — underground storage tanks — gas leak — strict liability — third-party exception
The trial court erred by refusing to charge the jury on the third-party exception to the strict liability provisions of the North Carolina Oil Pollution and Hazardous Substances Control Act (OPHSCA) arising out of the contamination of plaintiff's well water with gasoline from the underground storage tanks located at defendant Mini Mart, and defendants are entitled to a new trial, because: (1) sufficient evidence was produced at trial to allow a reasonable inference from the jury that Barrett's actions were the cause of the discharge of gasoline; (2) a jury instruction as to Barrett's negligence did not correctly convey the exception; (3) there is no binding precedent showing a duty to affirmatively plead the exception, and while cases from other jurisdictions might be suggestive, they are not controlling; and (4) even if such affirmative pleading were required, the trial court granted a motion by Gosai and Mini Mart to amend its cross-claim to include Barrett, and copious evidence in the record existed that defendants several times mentioned Barrett as a third party whose acts or omissions might be considered to have intervened and thus relieved them of liability.
2. Appeal and Error — preservation of issues — denial of writ of certiorari
Although plaintiff contends under two cross-assignments of error that the trial court erred by granting a directed verdict for Gambill Oil Company, Inc. as well as a motion for directed verdict as to her claim of unfair and deceptive trade practices as to Gambill, Inc. and Jim Gambill, this issue is not addressed based on the Court of Appeals already denying plaintiff's petition for writ of certiorari to hear these arguments which were improperly preserved for appeal.
3. Appeal and Error — preservation of issues — new trial
Defendant's remaining assignments of error are not addressed because the case has already been reversed and remanded for a new trial.
Judge JACKSON concurring in part and dissenting in part.
Appeal by defendants from judgment entered 31 August 2005 and from an order entered 10 November 2005 by Judge Charles Lamm in Watauga County Superior Court. Heard in the Court of Appeals 21 March 2007.
Sigmon, Clark, Mackie, Hutton, Hanvey Ferrell, P.A., by Warren A. Hutton, Forrest A. Ferrell, and Nancy L. Huegerich, for plaintiff-appellee. Vannoy Reeves, PLLC, by Jimmy D. Reeves and M. Alexandra Reeves, for defendant-appellants J. Gwyn Gambill, Inc. and Jim Gambill; di Santi Watson Capua Wilson, by Frank C. Wilson, III, for defendant-appellants Gunvantpuri B. Gosai and BB Mini Mart, Inc.
Defendants Jim Gambill ("Gambill"), Gunvantpuri B. Gosai ("Gosai"), and BB Mini Mart, Inc. ("Mini Mart") (collectively "defendants"), appeal from the trial court's denial of their motions for directed verdict, judgment notwithstanding the verdict, and new trial. These defendants, along with defendant J. Gwyn Gambill, Incorporated ("Gambill Inc."), appeal the trial court's instructions to the jury as to punitive damages and an exception to the strict liability statute. After careful review, we find that the trial court erred in failing to instruct the jury on the exception to strict liability, and remand for a new trial.
In January 2005, Kate H. Ellison ("plaintiff") discovered her well water had been contaminated with gasoline. That gasoline was later determined to have leaked from the underground storage tanks located at the Mini Mart. After the leak was discovered, defendants hired Jeff Barrett ("Barrett"), who had installed a new monitoring system, sumps, and lines at the Mini Mart in May 2001, to perform whatever repairs were necessary to stop the leak. Plaintiff brought suit and after a jury trial was awarded $500,000.00 from Gambill, Gambill Inc., Gosai, and the Mini Mart, including compensatory and punitive damages. Defendants appeal.
Defendants argue that the trial court's refusal to charge the jury on the third-party exception to the strict liability provisions of the North Carolina Oil Pollution and Hazardous Substances Control Act ("OPHSCA") is an error requiring remand for new trial. We agree.
The only basis for liability submitted to the jury was strict liability under OPHSCA, which states: "Any person having control over oil or other hazardous substances which enters the waters of the State . . . shall be strictly liable, without regard to fault, for damages to persons or property, public or private, caused by such entry[.]" N.C. Gen. Stat. § 143-215.93 (2005). Per N.C. Gen. Stat. § 143-215.77(5) (2005), "having control over" includes "any person[] using, transferring, storing, or transporting oil or other hazardous substances immediately prior to a discharge of such oil . . . into the waters of the State, and specifically shall include carriers and bailees of such oil[.]" Id.
A third-party exception is given by N.C. Gen. Stat. § 143-215.83(b)(2)(d) (2005), which states:
(b) Excepted Discharges. — This section shall not apply to discharges of oil or other hazardous substances in the following circumstances:
. . .
(2) When any person subject to liability under this Article proves that a discharge was caused by . . .:
. . .
(d) An act or omission of a third party, whether any such act or omission was or was not negligent.
Id.
When reviewing the refusal of a trial court to give certain instructions requested by a party to the jury, this Court must decide whether the evidence presented at trial was sufficient to support a reasonable inference by the jury of the elements of the claim. Blum v. Worley, 121 N.C. App. 166, 168, 465 S.E.2d 16, 18 (1995). If the instruction is supported by such evidence, the trial court's failure to give the instruction is reversible error. Erie Ins. Exch. v. Bledsoe, 141 N.C. App. 331, 335, 540 S.E.2d 57, 60 (2000). Thus, the appropriate inquiry here is whether evidence existed to support the request for an instruction on the third-party action exception. Because we believe such evidence did exist, we remand for a new trial.
Testimony as to the physical cause of the leak was given by several individuals. Per Barrett's testimony, when he came to make repairs in January 2005, he found that the filters on one dispenser "had pinholes in them and were spraying gas into the sump." Evidence presented at the trial tended to show that gasoline then leaked into the surrounding area when a clamp on that sump failed to maintain a seal around the boot, the entry point for hoses into the sump.
All relevant testimony at trial agreed that this failure of the clamp to maintain a seal led to the leakage. Randy Cavallier, a geologist with the environmental consulting firm Gambill called in to assess the contamination, testified that he saw the sump in question and his understanding of the cause of the leak was a "bad clamp." Gambill testified that Barrett made three attempts to fix the leak by applying sealant around the boot, but Barrett was only successful in getting the sump to again hold liquid without leaking when he repaired the "stripped screw and clamp." Glen Howell, the lead maintenance person for Gambill Inc., testified that "the clamp was stripped" and the boot itself was installed backwards. Barrett himself acknowledged that the clamp was stripped. Further, when Barrett was asked whether the only thing he needed to do to fix the leak was to put in a new boot and new clamp, he answered: "That is the only way the gasoline was getting out of the sump."
It seems clear from the record that sufficient evidence was produced at trial to allow a reasonable inference by the jury that Barrett's actions were the cause of the discharge of gasoline. As such, failure to instruct the jury on the third-party exception to the strict liability statute was error.
Plaintiff argues that, even if such evidence existed, any error in omitting an instruction on the exception was harmless because the verdict sheet contained the following question as to Barrett's negligence: " Issue 11: Was the third party plaintiff, J. Gwyn Gambill, Inc., damaged by the negligence of the third party defendant, Jeff Barrett d/b/a Barrett Petroleum?" However, as noted above, the statutory exception reads: "When any person subject to liability under this Article proves that a discharge was caused by . . . [a]n act or omission of a third party, whether any such act or omission was or was not negligent." N.C. Gen. Stat. § 143-215.83(b)(2)(d) (emphasis supplied). An instruction to the jury as to Barrett's negligence does not correctly convey the exception, and as such was inadequate.
The dissent argues that, because Gosai and Mini Mart affirmatively pled the exception as to co-defendants Gambill and Gambill Inc. but not as to Barrett, Gosai and Mini Mart waived their right to ask for an instruction on the exception, regardless of whether the evidence warranted such an instruction. However, this point is correct only if it is true that Gosai and Mini Mart were required to affirmatively plead the exception, and the dissent does not offer, nor do we find, any binding precedent showing a duty to affirmatively plead the exception. The only support for this statement that the dissent offers consists of cases from other jurisdictions wherein federal courts have made holdings under a federal statute, not our state courts making holdings under the OPHSCA. As such, while the cases might be suggestive were we to analogize their holdings to the statute at issue here, they are certainly not controlling. In this case, we choose not to follow them.
It is worth noting that no party to this appeal argues or even suggests to this Court that any appellant has waived or failed to preserve for appeal the issue of failure to include the exception injury instructions.
Further, even if such affirmative pleading were required, on 5 March 2004 the trial court granted a motion by Gosai and Mini Mart to amend its cross-claim to include Barrett. The amended cross-claim contained the following clauses:
16. Gambill and Barrett leaked, released, discharged or caused to be leaked, released, or discharged, without authorization or permit, hazard and toxic substances into or upon waters or land on or near the subject property.
17. Gambill and Barrett had control over the hazardous and toxic substances immediately prior to the leak, discharge and release into or upon waters or lands on or near the subject property.
18. Immediately after the leak, release, discharge, or immediately after becoming aware of the leak, release or discharge of hazardous and toxic substances into or upon waters or lands on or near subject property, Gambill and Barrett had the duty to undertake remedial actions to collect and remove the discharge and to remediate and restore the area affected by the discharge as nearly as may be to the condition existing prior to the discharge.
Again, in Gosai and Mini Mart's Requested Jury Charges submitted on 24 August 2005, they submitted the following: "Was the discharge of Gasoline . . . caused by an act or omission of a third party other than GB Gosai or BB Minimart, Inc.[?]" The letter from their attorney containing this request goes on to expound on the request by noting that there exists an exception to the strict liability statute saying that strict liability "does not apply when any person subject to liability under this Article, such as [Gosai or Mini Mart,] proves that a discharge was caused by an act or omission of a third party, whether any such act or omission was or was not negligent." This, of course, is almost verbatim the exception in the statute, and at no point in the request are Gambill or Gambill Inc. mentioned as the third parties to whom the letter refers.
Again, in their motion for judgment notwithstanding the verdict or new trial filed on 8 September 2005, Gosai and Mini Mart state as partial grounds:
3. This Court erred in failing to charge the jury, as requested in writing by the Defendants B B Mini Mart, Inc. and Gosai, that there was an exception to the Strict Liability provisions of the North Carolina Oil Pollution and Hazardous Substances Control Act set forth in N.C.G.S. § 143-215.83(2)(d). This Court should have instructed the jury that if B B Mini Mart, Inc. and Gosai proved that the discharge of a hazardous substance was caused by an act or omission of a third party, strict liability would not apply. This was a correct statement of the law, presented to this Court in writing and was warranted under the facts presented to the jury.
Thus, copious evidence exists in the record that defendants Gosai and Mini Mart several times mentioned Barrett as a third party whose acts or omissions might be considered to have intervened and thus relieved them of liability. As such, we believe that, even were such a claim required to be affirmatively pled, defendants Gosai and Mini Mart have met that burden.
Finally, we note that in her brief plaintiff argued, pursuant to two cross-assignments of error, that the trial court erred in granting a directed verdict for Gambill Oil Company, Inc. as well as the motion for directed verdict as to her claim of unfair and deceptive trade practices as to Gambill Inc. and Jim Gambill. Having already denied her petition for a writ of certiorari to hear these arguments, which were improperly preserved for appeal, we do not address them here.
Because we reverse and remand for new trial on this assignment of error, we do not address defendant's remaining assignments. See, e.g., Lonon v. Talbert, 103 N.C. App. 686, 697, 407 S.E.2d 276, 283 (1991).
Reversed and remanded.
Judge TYSON concurs.
Judge JACKSON concurs in part and dissents in part in a separate opinion.