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Mareld Co., Inc. v. New England Telephone and Telegraph Co.

United States District Court, D. New Hampshire

November 28, 2018

Mareld Company, Inc.
New England Telephone and Telegraph Company n/k/a Verizon New England Inc.

          Terri L. Pastori, Esq. Beth A. Deragon, Esq. Jeffrey M. Karp, Esq. Nathaniel R. Koslof, Esq. Nicholas M. O'Donnell, Esq. Kyle M. Noonan, Esq. Mark B. Rosen, Esq.



         Mareld Company seeks to hold New England Telephone and Telegraph Company (“NET”) liable for the cleanup of polychlorinated biphenyl (“PCB”) contamination at a commercial property that Mareld leased to NET. NET argues that Mareld's state-law claims for breach of contract and negligence per se are time-barred. It is undisputed that this action was filed more than three years after the lease ended, which is the applicable limitations period. Accordingly, I must determine whether the discovery rule tolls the statute of limitations.

         I. BACKGROUND

         A. Lease Agreements

         From 1970 until 2011, NET leased a motor vehicle garage facility located at 100 Tri City Road in Somersworth, New Hampshire from Mareld and its predecessors. The garage was constructed around 1970, shortly before NET took possession. The original lease agreement, executed in 1970, provided for a twenty-year lease term. A provision in the 1970 lease stated that “at the expiration of the said term [NET] will quit and surrender the leased premises in as good state and condition as reasonable use and wear thereof and alternations therein will permit.” Doc. No. 34-8 at 1.

         When the 1970 lease expired in 1990, Mareld and NET signed a new lease agreement for a five-year period. The parties later executed four amendments to the 1990 lease, extending the lease term incrementally through October 2011. At the end of the term, the 1990 lease required NET to “peaceably yield up [the] Premises and all additions thereto to [Mareld], leaving the same clean and in such repair, order and condition as in the Commencement date.” Doc. No. 34-10 at 4.

         NET vacated the facility in 2008, when it sold its northern New England landline telephone business to FairPoint Communications. FairPoint continued to use the facility until October 2011, paying $37, 541 in monthly rent at the end of the lease term. Doc. No. 81-3 at 2. I assume, without deciding, when resolving the statute-of-limitations issue that NET remained responsible to Mareld under the 1990 lease during FairPoint's occupancy.

         B. PCB Detections

         PCBs were first detected at the facility in 1990, during a routine cleaning of garage floor drains. NET's environmental consultant, Clean Harbors, conducted wipe sampling of four floor drains and the surrounding garage floor surface and collected soil samples from the drain discharge area behind the garage. Testing confirmed PCBs exceeding the regulatory limit in the garage floor drains and the drain discharge soil. The contaminated soil was removed, and the floor drains were decontaminated following the United States Environmental Protection Agency's cleaning instructions. Another round of sampling and testing revealed the continued presence of PCBs above the regulatory limit in the floor drains. Clean Harbors noted these results in an October 1990 report and stated that the type of PCB mixture detected, Aroclor 1254, “was once a common constituent of transformer oil, and it is possible that PCBs were at some time in the past released during the handling of transformers in the garage.” Doc. No. 79-8 at 34.

         At NET's behest, Clean Harbors conducted another round of cleaning and follow-up sampling. In a May 1991 report, Clean Harbors stated that the second remediation reduced the PCB levels to below the regulatory limit and that no further action was needed. Doc. No. 79-8 at 39. Mareld received both reports around the time they were issued. The reports were submitted to the New Hampshire Department of Environmental Services (“DES”), which did not require additional assessment or remediation.

         In connection with refinancing the property in 1991, Mareld hired Groundwater Technologies, Inc. (“GTI”) to prepare an environmental site assessment report. GTI collected a composite groundwater sample and soil samples from the floor drain discharge area and three locations where monitoring wells were installed. Testing confirmed that, where detected, PCB levels were below the regulatory limit. Doc. No. 79-8 at 12, 15.

         In 2010, FairPoint retained St. Germain Collins to assess the utility pole storage yard at the facility for various contaminants. St. Germain Collins collected soil samples from the pole storage areas, pole debris pile, and adjacent areas. Aroclor 1254, the same PCB mixture found in 1990-91, was detected in the upper six inches of some soil samples. The contaminated soil was removed in August 2011. Confirmation sampling showed that any remaining PCBs in the pole yard were below the regulatory limit. St. Germain Collins submitted a report dated October 3, 2011 to DES, which summarized its investigation and remedial actions and noted that the cause of the PCB contamination was unknown. Doc. No. 79-9 at 7-10. In December 2011, DES issued a “no further action” letter and removed the property from its active project list. Doc. No. 79-10.

         FairPoint kept Mareld apprised of St. Germain Collins's investigation, and Mareld received a copy of the October 3, 2011 report around the time it was prepared. That same month, Mareld's consultant, GeoInsight, observed oil stains on the garage floor during an inspection of the property but did not test the floor ...

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