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Monday, January 27, 2014

Ind. Decisions - 7th Circuit decides one Indiana case today

In BITLER INVESTMENT VENTURE II, LLC, et al. v. MARATHON PETROLEUM COMPANY LP, et al. (ND Ind., Springmann), an 11-page opinion, Judge Posner writes:

The appeal in this diversity suit governed by Indiana and Michigan law presents issues of contract and property law (the venerable doctrine of waste). The plaintiffs, affiliated real estate firms that we’ll pretend are one and call Bitler, sued affiliated oil companies that we’ll also pretend are one and call Marathon. Bitler seeks damages for harm caused by Marathon in attempting to clean up pollution at gas stations that Bitler had leased to it. According to Bitler’s law firm, the suit sought more than $9 million in damages. * * * Later its expert witness estimated Bitler’s damages at $17.4 million. But the final judgment was for only $269,000, and Bitler appeals. * * *

It would not make sense, or conform to the reasonable expectations of the parties, to limit liability for waste or other misconduct by a tenant simply because a lease originally for a specified time—that is, an estate for years—had to be extended for an indefinite period to allow a response to unforeseen changes. Those changes were the new EPA regulations in the late 1980s, which required extensive clean‐up of the properties. Neither Marathon nor the judge gave any reason for interpreting the Michigan statute literally in such a case.

So the judgment awarding damages for waste regarding the four Michigan properties is vacated with directions to the district court to double those damages. The dismissal of the contract claims relating to the canopies is affirmed, but the dismissal of the contract and waste claims relating to the buildings on the properties in Adrian and Michigan Center is reversed and that aspect of the case is remanded for trial. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH DIRECTIONS.

Posted by Marcia Oddi on January 27, 2014 04:56 PM
Posted to Ind. (7th Cir.) Decisions