Based on the language of a 1987 purchase agreement, the Fourth Circuit Court of Appeals has affirmed the grant of plaintiff’s summary judgment motion in a lawsuit seeking remediation costs for mercury contamination. Olin Corp. v. P.H. Glatfelter Co., No. 08-2252 (4th Cir. 3/5/10) (unpublished). In 1949, Olin purchased the Ecusta Paper Mill in Pisgah Forest, North Carolina, and through its manufacturing process released mercury on-site into wastewater that contaminated the facility and nearby properties. In 1987, Olin sold the property to defendant in a stock purchase agreement under which defendant agreed to indemnify Olin for specified cleanup costs.
After the North Carolina Department of Environment and Natural Resources notified both companies that it was taking an enforcement action with respect to the property, Olin sued defendant for declaratory relief. Defendant counter-claimed, alleging fraud. The district court granted Olin’s motion for summary judgment, ruling that the purchase agreement was clear that defendant was obligated to indemnify Olin for costs of cleanup described in the agreement. The district court also dismissed defendant’s state fraud claim as time-barred, and defendant appealed.
The appeals court held that defendant “unambiguously agreed to assume Olin’s liabilities” regarding contaminants at the site. The court also found “no improper conduct by Olin” and upheld the dismissal of the state fraud claim.