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Padgett Brothers LLC v. A.L. Ross & Sons, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

October 8, 2014

A.L. ROSS & SONS, INC., Defendant.


RICHARD L. YOUNG, District Judge.

Plaintiff, Padgett Brothers LLC ("Padgett"), is the owner of property contaminated by the type of chlorinated solvents typically used in dry cleaning. Padgett filed the present lawsuit against A. L. Ross & Sons, Inc. ("Ross"), a prior owner of the property that operated such a business, under the Comprehensive Environmental Response Compensation and Liability Act, 24 U.S.C. § 9601 et seq., ("CERCLA") and the Indiana Environmental Legal Actions statute ("ELA"). On September 3, 2013, the court granted summary judgment in favor of Padgett as to liability only. (Filing No. 90). The court held a hearing on damages on November 19, 2013, and entered its Findings of Fact and Conclusions of Law (the "Entry") on July 16, 2014. (Filing No. 113). The court ordered briefing on the issue of attorneys' fees, which has now been completed. For the reasons set forth below, the court GRANTS in part and DENIES in part Padgett's request for attorneys' fees.

I. Discussion

Padgett seeks the recovery of $363, 910.94 in attorneys' fees and costs plus $44, 784.80 in interest for a total of $408, 695.74 pursuant to the ELA and CERCLA. Ross does not contest the reasonableness of the fees, but rather whether the fees are recoverable under the pertinent statutes. The court will first address the ELA as it is broader in scope and then turn to CERCLA.

A. Recovery under the ELA

The ELA specifically authorizes the recovery of attorneys' fees in an environmental legal action so long as they are reasonable. See Ind. Code § 13-30-9-3(a)(6). Ross recognizes this, but argues that the fees are limited to those incurred in prosecuting the ELA action. Therefore, Ross argues that the court should reduce the fees by the amount related to dealing with IDEM and then by half or more to account for the two-count litigation. Finally, according to Ross, the amount should then be reduced by the amount attributable to the Ellisons, pursuant to Ross's non-party defense.


According to Ross, Padgett seeks to recover approximately $20, 196.00 in fees stemming from Padgett's dealings with the Indiana Department of Environmental Management ("IDEM"), enrolling in the Voluntary Remediation Program, and subsequently entering into a Voluntary Remediation Agreement ("VRA") with IDEM. Ross argues that these fees are not recoverable under the ELA because the statute only provides for fees incurred in prosecuting the claim. Padgett responds that Ross's suggested interpretation is incorrect; rather, it is part of the response and recovery costs. The court agrees with Padgett.

The ELA provides for recovery of the costs of removal and remedial action. The purpose of the VRP is to "provide a process for property owners, operators, potential purchasers, and third parties to voluntarily address (by investigating and, if necessary, remediating) property that is or that may be contaminated." Padgett's dealing with IDEM and enrollment into the VRP clearly consisted of remedial actions and thus are costs that can be allocated among the parties under the ELA. In evaluating the factors in Indiana Code § 13-30-9-3, the court finds that allocating the costs to Ross is appropriate as it was the only party to this lawsuit to have control over the property during the time of contamination. Thus, the court finds that these fees are recoverable under the ELA.

2. Fees Pertaining to ELA versus CERCLA

Ross argues that the fees awarded to Padgett should be cut in half or more because they are not solely attributable to the ELA claim. As Ross states, when a statute authorizes attorneys' fees for recovery under one cause of action, but not another, a court should only authorize reimbursement of fees incurred in pursuing that one cause of action that allows for such fees. See Shell Oil v. Meyer, 684 N.E.2d 504, 524 (Ind.Ct.App. 1997), summarily aff'd in relevant part by Shell Oil v. Meyer, 705 N.E.2d 962, 981 (Ind. 1998). Ross, however, fails to note that when an overlap between the two causes of action occurs, the Court determined "[it] would not disallow compensation for the attorney's fees earned and costs expended." Id. Only those fees that are incurred working exclusively on the causes of actions not providing for fee recovery are prohibited. See id.

Padgett thus argues that all of the fees fall into this overlapping exception because CERCLA and the ELA are so closely related. The court agrees with Padgett that there is the potential for much overlap between the two claims. As the court previously stated, Indiana's ELA statute "is analogous to CERCLA's § 107(a) cost-recovery provision." (Filing No. 90) (citing Armstrong Cleaners, Inc. v. Erie Ins. Exch., 364 F.Supp.2d 787, 813 n. 10 (S.D. Ind. 2005)). Additionally, the court found that "the analysis of [the ELA] claim is virtually the same as the analysis set forth above with respect to Padgett's CERCLA § 107(a) claim." (Filing No. 90). The court disagrees, however, that this similarity means that all attorneys' fees and expenses are recoverable under the ELA.

Ross submitted an excel spreadsheet displaying several charges beginning in May 2010 and ending in July 2014 that were CERCLA specific, which totaled $8, 364.50. (Filing No. 123-1). The court, having reviewed the itemized fee statements provided by Padgett, finds that Padgett may not recover for the fees that are designated CERCLA specific. The court adopts in part Ross's chart (Filing No. 123-1) as to those fees which Padgett may not recover under the ELA with the following exceptions:

• (1) half of the Entry dated 07/23/2012 by DLH for reviewing Plaintiff's response to settlement demand and consider ...

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