A federal court in Ohio has entered a $1.3-million default judgment against an asbestos remediation contractor for improper disposal of asbestos and fraud. Dayton v. A.R. Envtl. Inc. No. 11-383, (S.D. Ohio default judgment entered 10/29/12).

Dayton, Ohio, and A.R. Environmental Inc. (A.R.) had multiple contracts that called for A.R. “to perform abatement work (asbestos surveys and remediation) and demolition activities on more than 40 properties.” According to the city, A.R. failed to complete inspections, did not remove all the asbestos it found and buried some of the asbestos it removed on city-owned property. A.R. also allegedly reported the presence of asbestos-containing material that was never present in some buildings and received compensation for remediating that non-existent material, and left asbestos-containing material in place despite reporting that it had all been removed.

The city alleged that, based on A.R.’s reports that it had properly completed required work, the city paid A.R. almost $250,000. The city sought damages for breach of the underlying contracts and punitive damages. A.R.’s statutory service agent executed a waiver of substance, but A.R. never appeared in the case, and a default judgment was rendered against it. After a hearing on damages, the court awarded the city more than $453,000 in compensatory damages, including the amount previously paid to A.R. for work it had not completed, past and future costs to investigate and remediate properties where A.R. buried asbestos, and costs to complete other abatement work that had not been done.

The city also sought punitive damages exceeding $900,000. The court found that A.R.’s false statements to the city about its surveys and abatement work constituted fraud, satisfying the requirement that a tort have been committed. The court also found a conscious disregard for the rights and safety of the public in A.R.’s actions, concluding that A.R. exposed people to asbestos through improper management of the material. Finding that A.R. caused physical harm to the environment and the public, and exhibited indifference to or reckless disregard of others’ health or safety on multiple occasions, the court found “a large award of punitive damages is justified.”

Pointing to precedent upholding punitive damages that were double the amount of the compensatory damages, the court awarded the city the roughly $906,000 that it had requested. The court also required that A.R. indemnify and hold harmless the city for enforcement relating to violations of asbestos-related regulations and declared that A.R. is liable under the Comprehensive Environmental Response, Compensation, and Liability Act for any response costs the city may incur connected to the illegal asbestos disposal.