FROM OLDHAM CIRCUIT COURT HONORABLE KAREN A. CONRAD, JUDGE
ACTION NO. 13-CI-00688
FOR APPELLANTS: Joseph E. Conley, Jr. Florence, Kentucky.
FOR APPELLEE: Kenneth A. Bohnert Bradley R. Palmer
BEFORE: ACREE, J. LAMBERT, AND THOMPSON, JUDGES.
LAMBERT, J., JUDGE.
and Jim Muncie have appealed from the order of the Oldham
Circuit Court granting summary judgment to Patricia
Wiesemann on their claim for stigma
damages arising from an oil leak on Wiesemann's property
that caused damage to the Muncies' property. Finding no
error, we affirm.
underlying facts of this case are briefly set forth in a
series of correspondence between and from Kentucky officials
in the Energy and Environment Cabinet. A memorandum dated
January 13, 2011, from Environmental Response Branch Manager
Robert Francis to Energy and Environment Cabinet Secretary
Leonard K. Peters provided in relevant part as follows:
On December 2, 2010, the Energy and Environment Cabinet's
Environmental Response Branch responded to a release of 1000
gallons of #2 Fuel Oil (aka Home Heating Oil) from a failed
underground storage tank. The tank is an
"unregulated" home heating oil tank at an
unoccupied house owned by the Martha Magel Estate. The oil
migrated several hundred feet through the subsurface and
began entering the basement sump pump at the home of Jim and
Cindy Muncie. The executrix of the Martha Magel Estate hired
an environmental contractor to remove the failed tank, and to
prevent the entry of petroleum into the Muncie residence.
However, as of December 8, petroleum continued to enter the
Muncie residence. Additionally, the sump pump failed, causing
the basement to be flooded with petroleum contaminated water.
Based on the continued impacts to an off-site residence, it
was necessary that our agency implement emergency abatement
procedures at the Muncie residence to limit any human health
or environmental impacts. In accordance with the statutory
authority stipulated in KRS 224.46 580 (3), the Department is
requesting that an environmental emergency be declared to
expedite the efforts that occurred to limit any human health
or environmental impacts.
memorandum went on to request funds from the Hazardous Waste
Assessment Account to fund the abatement actions; the
estimated cost of the emergency phase of the cleanup of the
site was not expected to exceed $70, 000.00. In a letter to
Wiesemann dated January 3, 2012, Ron Lovitt, a supervisor
from the Petroleum Cleanup Section of the Superfund Branch,
provided the following information:
The Kentucky Division of Waste Management (KDWM) has reviewed
the final sampling data taken December 15, 2011 to confirm
the results of remedial activities preformed [sic] on the
Muncie property to remediate the contaminated soil and
groundwater. The data documents that the soil and groundwater
has been remediated and no further action is needed at both
the Magel Estate and Muncie properties. The analytical
results document that the previously impacted areas are all
below regulated levels. Therefore, KDWM concludes that no
further action is required at this time. This site has met
the Option C (Clean Closure-Restored) cleanup requirements.
This closure brings this site into compliance with 401 KAR
100:030 and KRS 224.01-405. This compliance extends only to
the known aspects of this release and any additional
information on this release or other releases may require
Insurance Company provided liability insurance for Wiesemann,
and in May 2011, Auto-Owners filed an Interpleader Complaint
in the United States District Court for the Western District
of Kentucky in Louisville against Wiesemann, the Muncies,
Samuel and Bonnie Dunkle, Shield Environmental Associates,
Inc., and the Kentucky Department for Environmental
Protection (specifically, its Environmental Response Team and
the division of Waste Management, Superfund Branch).
Auto-Owners had $300, 000.00 in liability coverage for claims
made against Wiesemann related to the oil leak in November
2010 or the cleanup of the leak.
parties in the federal action entered into a partial
settlement and partial release agreement in September 2013.
Auto-Owners had already paid $112, 221.30 to parties for
cleanup costs, leaving a remaining balance of $187, 778.61,
which it paid into the Clerk's registry account. Doing so
discharged Auto-Owners' obligation to any claims from
third parties. From those funds, the Muncies received $60,
000.00, the Dunkles received $7, 000.00, Shield Environmental
Associates received $70, 000.00, and the Kentucky Department
for Environmental Protection received $50, 778.61. The
parties also agreed to a dismissal of all claims upon the
effective date of the agreement, with the following the
The Agreed Order shall provide for dismissal of all claims by
all parties against Wiesemann and the Estate of Magel, with
prejudice, except for (i) claims by the Muncies asserting
the diminution of the value of their real estate due to the
stigma resulting from the contamination, and (ii) for claims
asserted by the Muncies for personal injuries. The
Agreed Order shall further provide for dismissal with
prejudice of all other claims, except the Muncie's
[sic] claims against Shield for basement interior damage
(including any floor covering or other fixtures affixed to
that part of the real estate) arising out of performance of
the cleanup services, generally set forth in Count 5 of the
Muncie's [sic] Amended Cross-Claim, Exhibit 3 to document
No. 40 in the Action. . . . All claims by the Muncies
for contamination and/or damage to the exterior of their home
and surrounding grounds, including but not limited to, the
pool liner, driveway, landscaping, and/or septic tank,
arising from either or both the leak or clean-up activities,
are not within the scope of this reservation of claims, and
thus are fully released and discharged.
federal action was dismissed shortly thereafter pursuant to
the terms of the agreement.
October 2013, the month after the parties entered into the
agreement in the federal action, the Muncies filed a state
claim in Oldham Circuit Court against Wiesemann and Shield
Environmental Associates. They alleged 1) that Wiesemann negligently
maintained or operated the fuel tank at the property, which
resulted in the oil discharge and damage at the Muncies'
residence; 2) that Wiesemann caused a trespass on their land
through the negligent or reckless introduction of oil from
her property; and 3) that Wiesemann's actions created a
permanent nuisance on their property. In her answer,
Wiesemann opposed the Muncies' allegations in the
complaint and raised several affirmative defenses, including
that the complaint failed ...