### The Honorable Harry F. Barnes, United States District Judge 1 

### for the Western District of Arkansas. ___________ No. 95-3270

___________ Lion Oil Company, Inc., * * Appellant, * * Appeal from the United States v. * District Court for the * Western District of Arkansas. Tosco Corporation, * * Appellee. *

___________ Submitted: May 13, 1996 Filed: July 19, 1996

___________ Before BOWMAN, Circuit Judge, HENLEY, Senior Circuit Judge, and WOLLMAN, Circuit Judge.

___________ WOLLMAN, Circuit Judge.
Lion Oil Company (Lion Oil) appeals the district court's grant o f 1 judgment on the plead ings to Tosco Corporation (Tosco) denying Lion Oil's claim that Tosco indemnify it for costs associated with the cleanup o f propertylocated on an oil refinery site pursuant to the Comprehensiv e Environmental Respons e, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq. (CERCLA). We affirm.

I.

Tosco operated an oil refinery located on approximately 385 acre s near El Dorado, Arkansas, from 1972 to 1985. To handle hazardous material s generated during this period, Tosco constructed

### L ion Oil was known as XYZ Inc. at the time of th e 2 

### transaction. -2- two ha zardous waste management units (HWMUs) regulated pursuant to th e Resource Conservationand Recovery Act (RCRA), 42 U.S.C. §§ 6901 et seq., and several solid waste management units (SWMUs) . On March 22, 1985, Lion Oil purchased the refinery from Tosco. Section 2.8(d) of the Asse t 2 Purchase and Sale Agreement (the Agreement) ente red into by the parties on that same date specifically provided that:
Tosco hereby agrees to indemnify and hold harmless [Lion Oil]

. . . for any and all (1) civil, legal and administrativ e cost s; (2) fines and penalties; (3) response, remedial an d clean-up costs, and (4) other costs or liability arising from any sudden or non-sudden harm to the environment or publi c hea lth resulting from actions of Tosco prior to the Closin g Date. . . . Costs which result from harm inflicted o r discov ered after the Closing Date, but which are th e consequence of actions taken by Tosco prior to this date, shall be indemnified by Tosco. The clean-up costs which Tosco agrees to indemnify include, but are not limited to, all studies, site assessments, and any and all other efforts taken to determine the extent of harm t o public health or the environment and/or to identify possibl e remedial alternatives th at could ameliorate such harm. Cleanup costs include costs incurred directly by [Lion Oil] or b y employees, agents, or contractors hired by [Lion Oil].

. . . Und er this clause, [Lion Oil] shall be indemnified for al l liabili tyand costs incurred under common law (federal o r st ate) or existing local, state or federal statutes tha t protect public health and/or the environment, inclu ding but not limited to, the followin g federal statutes: the Comprehensive Environmental Response, Compensation and Liability Act of 1980 42 U.S.C. Sec. 9601-9657[] . . . . The liability of Tosco pursuant to this Section 2.8 (d) shall expire at the end of four (4) years after Date of Closing and shall not exceed a total of $1,000,000 in the aggregate. . . .

### -3- In Augus t 1986, the parties executed an Amendment and Release (th e Rele ase). In exchange for Tosco's agreement to accept at a discoun t prepa yment by Lion Oil of Lion Oil's remaining note obligation for th e purchase price, the Release provided that:
Lion [Oil] hereby extinguishes, discharges, releases an d abandons any and all rights and claims against Tosco which it has or may have pursuant to the provisions of subse ction 2.8(d) of the March 22 Agreement, or to the extent any such claim s wou ld be covered by the provisions of said subsection 2.8(d ) even though also potentially covered within the genera l indemnification provisio ns of subsection 2.8(a), . . . whether no w existing or arising in the future, at common law, or i n equ ity, or created by any rule of law, regulatory order , statute or otherwise, and whether known or unknown.

In Novemb er 1988, Lion Oil decided to close the two HWMUs and filed for a RCRA post closure permit. The permit, which was approved i n September 1990, requi red Lion Oil to conduct post-closure maintenance and monitoring of the HWMUs. In addition, the permit required Lion Oil t o investigate and corre ct any potential leakage of hazardous materials from the SWMUs, in violati on of CERCLA. A preliminary investigation disclosed potential releases of hazardous waste from approximately eighteen SWMUs,
some of which had been constructed by Tosco. Lion Oil estimates that it may cost as much as $30,000,000 to bring the SWMUs into compliance wit h CERCLA.

In April 1994, Lion Oil brought suit against Tosco, seekin g contribution under CE RCLA for the clean-up costs of the property. In May 1995, Tos co filed a motion for judgment on the pleadings, which th e district court granted.

II.
Lion Oil contends that the district court erred in concluding tha t the Agreement and the Release combined to constitute a general

### -4-

release of Tosco's CERCLA liability. Lion Oil alleges that the district court should have allowed the admission of extrinsic evidence t o demonstrate the parties' actual intent in drafting the documents.
We review de novo the district court's grant of a motion for ju dgment
on the pleadings. Westcott v. City of Omaha , 901 F.2d 1486, 1488 (8th Cir
. 1990 ). Judgment on the pleadings is appropriate if the moving part y clearly establishes t hat there are no material issues of fact and that he is entitled to judgment as a matter of law. National Car Rental v
. Computer Associates , 991 F.2d 426, 428 (8th Cir.), cert. denied , 114 S. Ct
. 176 (1993). Under th is strict standard, we accept as true all facts pled by the non-moving party and draw all reasonable inferences from th e pleadings in his favor. Id.

CERCLA provides that a former owner or operator of a facility i s jointlyand severally liable for cleanup associated with hazardous waste sites. 42 U.S.C. § 9607(a). CERCLA does, however, permit one party t o insure, hold harmless , or indemnify another party for liability under the statute. § 9607(e); see also Fisher Dev. Co. v. Boise Cascade Corp. , 37 F.3d 104, 107 (3d Cir. 1994) (parties may allocate among themselve s financ ial burden for cleaning up hazardous waste site under CERCLA)
. Courts will enforce a contract allocating CERCLA liability when "th e provisions [of the contract] evince a clear and unmistakable intent of the parties to do so." K eywell Corp. v. Weinstein , 33 F.3d 159, 165 (2d Cir. 1994).
Lion Oil contends that the contracts are ambiguous and that ext rinsic evidence should therefore have been admitted to show the true intention of the parties. Specifi cally, Lion Oil seeks to offer evidence to show that Section 2.8(d) was meant to cover only the two H WMUs and was not a general limitation on potential CERCLA liability for the SWMUs.

### -5- Under Arkansas law, which the parties agree governs the contracts , the language contained in the contract is the best evidence of the parties ' inten tions. First Nat'l Bank v. Griffin , 832 S.W.2d 816, 818-19 (Ark
. 1992), cert. denied , 113 S. Ct. 1280 (1993). Thus, we first look to the contract itself to determine if it is ambiguous -- not to extrinsi c evidence offered to contradict the plain meaning of the contract. Id.

The district court found that "[t]he Purchase Agreement and th e Releas e are clear, unequivocal and unambiguous in their allocation o f Tosco 's liability and its release therefrom." We agree that the plai n language contained inthe contracts compels such a result. The Agreement contained a broad ind emnity provision that encompassed environmental harm caused by Tosco. Ind eed, Section 2.8(d) specifically referred to CERCLA. The Release absolves Tosco from all obligations under Section 2.8(d). In these circumstances, the Agreement and Release unequivocally combine t o allocate to Lion Oil any potential liability arising under CERCLA. Th e parol evidence rule prohibits the admission of e xtrinsic evidence to alter these otherwise unambiguous contracts. Griffin , 832 S.W.2d at 818-20; see also Rainey v. Travis , 850 S.W.2d 839, 840 (Ark. 1993) (extrinsic evidence not admissible when agreement is unambiguous on its face).

We note t hat this is not a case in which an unsophisticated part y hastily entered into a contract. It is clear th at Lion Oil was aware that the purchase of an oil refinery involved a risk of significant potential enviro nmental liability, as exhibited in the detailed provisions of th e Agreement. As the district court recognized, "T he fact that hindsight may have proven the Agree ment to be a bad business decision for Lion Oil does not negate its validity."
The judgment is affirmed.

### -6- A true copy.

Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.