Article Appeared in Florida Lawyer, written by Tony Doris, February 2002
Case: Lee E. Hanna and Nancy R. Hanna v. Ashland, Inc., U.S. District Court in Tampa, Case No. 8:00-CV-188-T-26A.
Plaintiffs’ attorneys: Thomas P. Scarritt, Jr., President of Scarritt Law Group in Tampa and Valeria Hendricks and Kevin Woods, then-associates of Davis & Scarritt in Tampa.
Defense attorneys: David B. Weinstein, partner and shareholder at Bales & Weinstein in Tampa, and Marian Rush, an associate at that firm.
Judge: Richard Lazzara.
Details: The Hannas bought a 7-acre tract near Tampa International Airport about 30 years ago as an investment. When they decided to sell it to finance their retirement, they discovered that pollution had leeched from a neighboring property, owned by Ashland Chemical, a Columbus Ohio chemical-mixing and distributing company, making their land difficult to sell.
In August 1996, the company negotiated an option to buy the Hanna property for $1.1 million. They extended that option a month later. Then, when the purchase deadline approached, the company said its business plan had changed and canceled the purchase.
The Hannas tried to sell the property, and fielded offers as high as $1.5 million. But when they showed potential buyers reports documenting contamination, the offers evaporated.
In December 1999, the couple sued Ashland Chemical in Hillsborough Circuit Court. The company, a division of Ashland, Inc., a Fortune 250 company based in Covington, Ky., had the case moved to federal court.
The eight-count complaint included claims for violations of Florida environmental, trespass and public nuisance laws, as well as the Florida Litter Law, which provides for treble damages and attorney fees.
An environmental expert hired by Scarritt estimated that it would cost as much as $2.5 million to clean up the site. The defendants disputed that finding, citing their own experts who said nature would take care of the cleaning over time.
Defense case: Ashland conceded that it contaminated the groundwater. But it argued that the entire area north of the airport was known by the state to have groundwater contamination, so the company’s pollution didn’t appreciably lower the value of the Hanna property. The company also presented aerial photos from previous decades, along with ground-boring results, to show that it was likely the Hannas had contributed to the site’s problems or had allowed others to dump construction debris and trash.
Ashland had long agreed to indemnify any buyer, Weinstein says. But the company said that, since there were many other sources of contamination in the area, it would not accept responsibility for other companies’ contamination.
Key documents: Scarritt and an environmental engineer went to Ashland’s Columbus offices and found a document which showed that a consultant hired by Ashland reported in July 1985 that he’d found soil and groundwater contamination, believed to be from spillage, on the company’s Tampa property. In other document, dated just one month later, Ashland had filled out a Florida Department of Environmental Protection questionnaire in which the company stated that there had been no release of hazardous materials.
Scarritt informed Ashland that the documents would be the basis for punitive damages claims. He says that helped convince Ashland to take the case seriously during the arbitration and mediation.
Weinstein dismisses that view. He says the questionnaire response was truthful, because many pollutants do not fall under the statutory definitions of hazardous waste.
But Ashland also knew that Scarritt had potential buyers of the site ready to testify that they backed out because of the contamination.
Turning point: The court ordered the case to an arbitration panel. The arbitrators recommended that Ashland buy the property, and urged the parties to go to mediation, where the settlement was reached.
Settlement: After arbitration, mediation and three months of settlement talks, Ashland agreed on June 18 to pay the Hannas $1.7 million and take over the property.
Defense comment: “This was one of those cases where the parties could agree to disagree and still reach a settlement,” Weinstein says, who argues that his client benefited by acquiring the land.