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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Greyhound Lines Incorporated,

Plaintiff, 

v. 

Viad Corporation, 

Defendant. 

No. CV-15-01820-PHX-DGC

ORDER 

 Plaintiff Greyhound Lines, Inc. (“GLI”) claims that Defendant Viad Corporation 

failed to satisfy contractual and statutory obligations to pay for environmental 

contamination at a property in Seattle, Washington. Doc. 30, ¶ 25. Viad asserts a 

counterclaim to recover money Viad paid GLI for environmental work at the property. 

Doc. 15 at 10. The Court held a six-day bench trial on May 3-5 and 10-12, 2017. 

Several witnesses testified and hundreds of exhibits were received in evidence. After 

reviewing the evidence carefully, the Court finds in favor of Viad on GLI’s claims and in 

favor of GLI on Viad’s counterclaims. This order sets forth the Court’s findings of fact 

and conclusions of law under Rule 52 of the Federal Rules of Civil Procedure. 

I. Findings of Fact – Background. 

 On December 22, 1986, the parties entered into an Acquisition Agreement under 

which GLI purchased from Viad more than 100 parcels of real estate along with buses, 

maintenance equipment, and other assets needed to operate the Greyhound bus lines 
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business. Ex. 1. These assets included the property at issue in this case, 1250 Denny 

Way, Seattle, Washington (the “Property” or “Seattle Property”).1

 

 Viad owned and operated the Seattle Property as a bus garage from 1948 until it 

sold the property to GLI. When GLI acquired the Property from Viad, it included 11 

underground storage tanks (“USTs” or “tanks”): three diesel fuel USTs (Tanks 1-3) on 

the west side of the maintenance building in the northwest part of the site; four USTs 

(Tanks 4-7) on the north side of the maintenance building in the northwest part of the site 

containing motor oil (Tank 4), antifreeze (Tank 5), water (Tank 6), and diesel fuel 

(Tank 7); one motor oil UST (Tank 8) to the west of the terminal building in the 

southwest part of the site; two waste oil USTs (Tanks 9-10) beneath the west end of the 

terminal building in the southwest part of the site; and one heating oil UST (Tank 11) east 

of the terminal building. After the purchase, GLI continued to use the Property for bus 

maintenance purposes, including use of the 11 USTs. 

 The Acquisition Agreement between the parties was dated December 22, 1986, 

but the transaction did not close until March 18, 1987. Before closing, three amendments 

to the Acquisition Agreement were signed by the parties. The most relevant is the Third 

Amendment, which addressed possible contamination from leaking USTs at each of the 

properties GLI acquired from Viad. Ex. 3. 

The Third Amendment provided that Viad would be responsible for 100% of 

remediation expenses for contamination discovered by GLI during the first year after the 

sale, provided GLI gave notice to Viad and started site work related to the contamination 

during the first year. Id., § 3.3. This liability would decrease to 80% for contamination 

discovered the following year (provided notice was given and work began), and by 20% 

each year thereafter, disappearing after five years. Id. The parties entered later 

agreements related to this liability that will be discussed below. 

 

1

 Citations are to exhibits received in evidence during the trial (Ex.) and other 

documents filed in the docket (Doc.). When docket pages are cited, the Court will use the page number attached to the top of each page by the Court’s electronic filing system. The Court’s findings of fact are based on all of the evidence received during the trial, regardless of whether cited in this order, including the Court’s credibility determinations. 
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 Between 1992 and 2009, GLI billed and Viad paid $588,719.54 related to 

contamination at the Seattle Property. Exs. 735, 736. Pursuant to the parties’ agreement 

for decreasing Viad liability, these payments represented an allocation to Viad of 60% of 

environmental costs at the Property. 

In 2007, GLI was acquired by FirstGroup plc. Doc. 124, ¶ 10. In 2008, GLI 

entered into a contract to sell the Property to the City of Seattle in lieu of condemnation. 

The sale was for a price of $31,755,200, but GLI and the City agreed that the price would 

be reduced by another $5.95 million to account for environmental contamination at the 

Property. The sale closed on March 13, 2009. The sale contract and related documents 

provided that the City would stop utilizing the Property as a bus garage and would 

convert it to a different use. After the sale, the City oversaw and paid for remediation 

and redevelopment of the site. 

 On September 11, 2015, GLI brought this case against Viad seeking declaratory 

and monetary relief for breach of contract. Doc. 30. Specifically, GLI claims that Viad 

is liable for 60% of the $5.95 million purchase price reduction GLI incurred when it sold 

the Property to Seattle. GLI also seeks to recover 60% of $46,050.85 GLI paid a 

consultant to investigate possible offsite sources of contamination after the sale closed. 

GLI further seeks to recover the full $5.95 million price reduction under the State of 

Washington’s Model Toxics Control Act (“MTCA”), and $196,350 for hazardous 

substance remediation under the federal Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980 (“CERCLA”). 

 Viad claims that it learned during this lawsuit that GLI had improperly billed it for 

$547,177 in environmental costs at the Seattle Property – costs for which it is not liable. 

Viad seeks to recover this amount for breach of contract. 

II. GLI’s Contract-Related Claims. 

 A. Conclusions of Law – Legal Standards. 

 The contracts at issue in this case are governed by Arizona law. Doc. 124. The 

parties entered into the following stipulations regarding the relevant law. Id. 
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 1. GLI and Viad entered into the Acquisition Agreement as amended by the 

Third Amendment, the Claims Treatment Agreement, and the Settlement Agreement, 

each of which is a valid and binding contract. 

 2. For GLI to recover from Viad for breach of contract, GLI must establish by 

a preponderance of the evidence that (1) GLI and Viad entered into a valid and binding 

contract, (2) GLI satisfied conditions precedent under the contract, (3) Viad materially 

breached the contract, and (4) the breach resulted in damage to GLI. 

 3. For GLI to recover for breach of the implied covenant of good faith and fair 

dealing, GLI must establish that (1) GLI and Viad are parties to a valid and binding 

contract, (2) Viad prevented GLI from receiving the benefits of the contract, and (3) GLI 

suffered damages as a direct and proximate result. United Dairymen of Arizona v. 

Schugg, 128 P.3d 756, 762 (Ariz. Ct. App. 2006). 

 4. “[I]n Arizona, a court will attempt to enforce a contract according to the 

parties’ intent.” Taylor v. State Farm Mut. Auto. Ins. Co., 854 P.2d 1134, 1138 (Ariz. 

1993). 

 5. Arizona does not adhere to the view “that ambiguity must exist before parol 

evidence is admissible.” Id. at 1140. Rather, “the judge first considers the offered 

evidence and, if he or she finds that the contract language is ‘reasonably susceptible’ to 

the interpretation asserted by its proponent, the evidence is admissible to determine the 

meaning intended by the parties.” Id. 

 6. “The acts of parties under a contract, before disputes arise, are the best 

evidence of the meaning of doubtful contract terms.” Associated Students of the Univ. of 

Ariz. v. Arizona Bd. of Regents, 584 P.2d 564, 569 (Ariz. Ct. App. 1978). 

B. Findings of Fact.

 1. The Relevant Contracts. 

 The Acquisition Agreement signed in 1986 makes Viad liable for “any claim, 

action, proceeding, damage, liability, loss, cost, expenses, judgment, fine, penalty or 

deficiency . . . arising out of, resulting from or related to . . . [a]ny liability or obligation 
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of [Viad].” Ex. 1, § 10.2. GLI has not shown that this agreement imposed any 

environmental liabilities on Viad. Bill Halliman, a former in-house attorney at Viad and 

the lead lawyer for Viad in formation of the Acquisition Agreement, testified that all 

properties were sold to GLI “as is.” Section 4.7 of the agreement confirms this fact, 

stating that the “Sale Assets” are sold “in an as is” condition.2

 Ex. 1, § 4.7. This was 

done, Halliman explained, so that environmental liabilities would transfer to GLI with the 

properties. GLI has identified no portion of the 64-page Acquisition Agreement that says 

anything about Viad retaining environmental liabilities. Indeed, the parties paid little 

attention to the Acquisition Agreement during trial, instead focusing their attention on the 

Third Amendment. 

 GLI claims that Viad is liable for breaching § 3.3 of the Third Amendment. GLI 

claims that Viad is liable for 60% of environmental liabilities incurred at the Property, a 

percentage limit set in the Third Amendment for contamination discovered during the 

third year after the sale.3

 

 The Third Amendment was entered on March 18, 1987, three months after the 

Acquisition Agreement. Ex. 3. Bill Halliman testified without contradiction that the 

Third Amendment’s environmental provisions arose because, during the three months 

after signing the Acquisition Agreement, GLI and its lenders became concerned that 

USTs on the properties could give rise to environmental liabilities. Article III of the 

Third Amendment therefore established a procedure for the parties to share this 

environmental risk in a way both sides found acceptable. Halliman testified credibly that 

Article III was not intended to include environmental liabilities other than leaks from 

USTs. Ken Ries, Viad’s in-house environmental manager who was responsible for 

 

2

 “Sale Assets” is defined in the Acquisition Agreement to include all assets GLI 

acquired in the transaction, including real estate. Ex. 1, § 1.3. 

3

 Consistent with the parties’ lack of attention to the Acquisition Agreement during trial, the evidence showed that the parties’ entire focus during more than 25 years of dealings with respect to the Seattle Property centered on the reimbursement procedures in the Third Amendment. The Court accordingly finds that the Third Amendment, as refined by later agreements and the parties’ course of dealing, is the controlling agreement in this case. 
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administering the Third Amendment for more than 25 years, also understood that Article 

III applied only to UST leaks. 

 The language of the Third Amendment is consistent with the testimony of 

Halliman and Ries. Section III is titled “Environmental Matters” and states that “the 

Parties desire to make certain arrangements with respect to certain underground storage 

tanks on properties [covered by the Acquisition Agreement].” Id., § 3.1. Section 3.3 

provides that, “[n]otwithstanding any provision of the Acquisition Agreement to the 

contrary, [Viad] shall be obligated to bear a proportionate share of any costs, fees, 

expenses, fines, penalties and governmental levies associated with remediation done in 

respect of leaks from the Tanks, and the actual costs or expenses of remediation of the 

properties where the Tanks are located . . . (collectively, the ‘Remediation Expenses’).” 

Id., § 3.3. “[Viad’s] proportionate share” for these UST expenses “shall be 100% of the 

Remediation Expenses for a period of one year after the Closing Date, and shall decrease 

linearly 20% every year thereafter, such that the Seller is not responsible for any 

Remediation Expenses from and after five years after the Closing Date.” Id. The Third 

Amendment thus included a step-down process under which Viad’s liability for UST 

remediation decreased each year, reaching zero after five years. Section 3.3 places on 

GLI “the remaining share of the Remediation Expenses.” Id. 

 In August 1991, the parties entered into the Claims Treatment Agreement. Ex. 4. 

Section 14(a) provides that “[t]he environmental indemnities in the Acquisition 

Agreement” – which is defined to include the Third Amendment – “shall be modified as 

follows: [Viad] shall have no obligation to indemnify [GLI] for any liabilities for 

environmental matters or claims, regardless of when the acts giving rise to liability 

occurred, and [GLI] shall assume all such environmental obligations and indemnities, 

except . . . indemnities arising from liabilities which are identified prior to March 1, 

1992.” Ex. 4, § 14(a). The Claims Treatment Agreement further provides that the 

liabilities identified before March 1, 1992 “shall continue to be governed by the 

Acquisition Agreement” (id.), as amended by the Third Amendment (id., Recital A). 
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Thus, the Claims Treatment Agreement makes clear that Viad’s environmental liability 

under the Third Amendment applies only to liabilities identified before March 1, 1992. 

 Eight years later, the parties entered into a Settlement Agreement that added 

relevant definitions. Ex. 5. The Settlement Agreement defines “Environmental 

Obligations” as follows: 

The term “Environmental Obligations” shall mean any and all liabilities 

and obligations, whether statutory, regulatory, contractual, legal, financial 

or otherwise, relating to the physical or environmental condition of a 

Property (as defined below), including but not limited to the presence, use 

or release of Hazardous Materials (as defined below) at a Property, the 

migration of Hazardous Materials to or from a Property, the transportation 

of Hazardous Materials from a Property, or off-site disposal of Hazardous 

Materials which were kept, used or stored at a Property, regardless of 

whether such liability or obligation is predicated upon tort, contract, strict 

liability, warranty, Superfund . . . or any other state or federal statute, law, 

ordinance, or other basis of liability for damage to the environment. 

Id., § 2.1. 

 The Settlement Agreement defines “Notified” as follows: 

[Viad] shall have been “Notified” about an Environmental Obligation only 

if: (a) the existence or nature of the Environmental Obligation has been 

reasonably disclosed in writing: (i) by [GLI] to [Viad], or (ii) by a state or 

federal environmental regulatory agency to [Viad], or (b) [Viad] has 

addressed or has been addressing such Environmental Obligations by way 

of site assessment, testing or remediation. 

Id., § 2.4. 

 The Settlement Agreement then revised § 14(a) of the Claims Treatment 

Agreement to make it consistent with these new definitions: 

[Viad] shall have no obligation to indemnify [GLI] for any liabilities for 

Environmental Obligations with respect to Properties, regardless of when 

the acts giving rise to liability occurred, and [GLI] shall assume all such 

Environmental Obligations and indemnities with respect to all Properties, 

except (A) indemnities arising from Environmental Obligations which 

[Viad was] Notified about prior to the Effective Date. The foregoing 

exception (A) shall continue to be governed by the Amended Acquisition 

Agreement[.] . . . In addition, [GLI] shall indemnify [Viad] with respect to 
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Environmental Obligations relating to Properties sold to [GLI] which [Viad 

was] not Notified about prior to the Effective Date. 

Id., ¶ 3.1. 

The “Effective Date” is the cut-off date established in the Claims Treatment 

Agreement – March 1, 1992. The Settlement Agreement made the cut-off more precise 

by stating that Viad must have been “Notified” of the liability by March 1, 1992, as 

opposed to the Claims Treatment Agreement’s provision stating that the liability merely 

needed to be “identified” by that date. 

 2. The Parties’ Interpretations and Arguments. 

 GLI argues that the Third Amendment makes Viad liable for the relevant 

percentage of all remediation costs at properties where GLI gave the required notice. 

GLI asserts that it gave notice and triggered Viad’s liability for subsurface contamination 

at the Seattle Property in 1989, making Viad liable for 60% of the remediation costs GLI 

billed to Viad between 1990 and 2009, as well as 60% of the price reduction GLI agreed 

to when the property was sold to the City of Seattle. 

 Viad disagrees, arguing that three steps had to occur before its liability was 

triggered under the Third Amendment as modified by the later agreements: (1) GLI had 

to give reasonable written notice to Viad, (2) a UST leak had to be confirmed at the 

Property, and (3) GLI had to commence remediation activities at the Property with 

respect to that leak. Although Viad agrees that these steps occurred in 1989 and 1990 for 

relatively minor diesel vapor leak at the Seattle Property, it claims that GLI failed to give 

it notice of the more substantial contamination that resulted in the post-1992 costs for 

which Viad was billed and the $5.95 million sale price reduction. 

 Before addressing the parties’ respective arguments, the Court will describe some 

additional facts that bear on interpretation of the agreements. 

On June 12, 1989, GLI wrote to Viad and stated that it had “identified 

hydrocarbon contamination in the soil and groundwater at the [Seattle] facility.” Ex. 15. 

GLI argues that this letter triggered Viad’s liability for 60% of all future environmental 
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costs at the Property.4 The letter further stated: “We have notified the State and have 

obtained a proposal from ENSR to conduct a site assessment and develop an assessment 

report[.] The cost of the assessment has been estimated at $18,644 and should be 60% 

reimbursable provided a leaking system is confirmed.” Id. (emphasis added). An 

attachment to the letter noted that three soil borings had been completed at the property 

and had encountered petroleum “sheen” in one boring and petroleum sheen and odor in 

another. Id. Two days later, Ken Ries responded that Viad “would have a 60 percent 

allocation if leaking is confirmed.” Ex. 261 (emphasis added). The emphasized language 

in these two letters reflects the parties’ understanding that Viad was liable only if a 

leaking UST was confirmed. 

 The site assessment commissioned by GLI was conducted in August 1989 and 

found total petroleum hydrocarbon (“TPH”) contamination in soil and groundwater at the 

site, but did not confirm a leaking UST. Ex. 35. There is no evidence that the site 

assessment was provided to Viad, and Ken Ries testified that he never saw it before this 

litigation. Viad’s internal invoice summaries show that Viad was never asked to pay for 

this site assessment work. Ex. 735. This comports with the fact that Viad had no liability 

for contamination at the site until a leak from a UST was confirmed. 

 In March 1990, GLI had a Tracer tank tightness test performed at the Property. 

The test found vapor leaks in an antifreeze UST (Tank 2) and a diesel fuel UST (Tank 7) 

in the northwest portion of the Property. Ex. 595. Consistent with the view that notice 

and a leak were not enough – that remediation activities also had to begin before Viad’s 

liability attached – GLI scrambled to get a consultant on the property before March 18, 

1990, the end of the third year during which a 60% allocation could be assigned to Viad. 

See Ex. 172. Indeed, an internal GLI document explained that “the emergency response 

was needed to secure a 60% reimbursement from [Viad]. A delay would have allowed 

 

4

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Property, such as through a fuel spill, but otherwise contends that the June 12, 1989 letter 

triggered Viad’s liability for all subsurface contamination later found at the site. 
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the reimbursement to drop to 40%.” Ex. 600.5 GLI sent Viad a letter dated March 15, 

1990, advising it of the tank leaks. Ex. 17. On July 9, 1990, Viad responded and 

accepted a 60% allocation. Ex. 20. 

3. Scope of the Agreements.

 GLI argues that a written notice under the Third Amendment made Viad liable for 

all contamination at a property, not just contamination related to a specific leaking UST. 

In support, GLI relies on the following sentence from § 3.3: “Notwithstanding any 

provision of the Acquisition Agreement to the contrary, [Viad] shall be obligated to bear 

a proportionate share of any costs, fees, expenses, fines, penalties and governmental 

levies associated with remediation done in respect of leaks from the Tanks, and the actual 

costs or expenses of remediation of the properties where the Tanks are located . . . 

(collectively, the ‘Remediation Expenses’).” Id., § 3.3 (emphasis added). GLI sees two 

categories of costs in this language: (1) “remediation done in respect of leaks from the 

Tanks,” and (2) “the actual costs or expenses of remediation of the properties where the 

Tanks are located.” GLI suggests that the second category includes more than 

remediation of UST leaks – remediation of the larger property is covered as well. 

 Viad responds that the two categories of liabilities in § 3.3 should be read this 

way: (1) “costs, fees, expenses, fines, penalties and governmental levies associated with 

remediation done in respect of leaks from the Tanks,” and (2) “the actual costs or 

expenses of remediation of the properties where the Tanks are located.” The first 

category would include costs that arise from the fact that a UST is leaking, such as fines, 

fees, or penalties from government regulators, while the second would include actual 

remediation costs caused by the UST leak. Viad argues that both of these categories must 

be linked to a UST leak. 

 

5

 The relevant date for the percentage step-down process – March 18 – arose from the fact that the Acquisition Agreement closed, and GLI became the legal owner of the properties acquired from Viad, on March 18, 1987. Ex. 3, § 3.1. The annual 20% 

reduction in Viad’s liability occurred on the anniversary of this acquisition date. See 

Ex. 5, ¶ 2.1; Exs. 501-503. 
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 As noted above, “in Arizona, a court will attempt to enforce a contract according 

to the parties’ intent.” Taylor, 854 P.2d at 1138. Arizona does not adhere to the view 

“that ambiguity must exist before parol evidence is admissible.” Id. at 1140. Rather, 

“the judge first considers the offered evidence and, if he or she finds that the contract 

language is ‘reasonably susceptible’ to the interpretation asserted by its proponent, the 

evidence is admissible to determine the meaning intended by the parties.” Id. “The acts 

of parties under a contract, before disputes arise, are the best evidence of the meaning of 

doubtful contract terms.” Associated Students, 584 P.2d at 569. The Court has 

considered the parol evidence offered by both parties and finds Viad’s evidence most 

persuasive and the language of § 3.3 most susceptible to Viad’s interpretation. 

 As noted above, GLI and Viad agreed in correspondence that Viad’s liability at the 

Seattle Property would not arise until a UST leak was confirmed. Exs. 15, 261. If Viad 

had been liable for environmental contamination at the property regardless of UST leaks, 

as GLI now contends, then confirmation of a UST leak would have been unnecessary. 

And yet GLI expressly stated in its notice that Viad would be liable for 60% of cleanup 

costs “provided a leaking system is confirmed.” Ex. 15. Viad responded that it would 

have a 60 percent allocation “if leaking is confirmed.” Ex. 261. Communications 

between the parties regarding other properties are consistent with this understanding. See 

Exs. 577, 579 (GLI advising Viad of a “tank system failure” at the Portland property and 

suggesting a 20% allocation, and Viad responding that it “assumes a 20 percent allocation 

of the cost of remediation work in connection with the leak”); Ex. 17 (GLI letter 

identifying properties where “UST Systems Identified as Leakers”). 

Viad’s interpretation is confirmed by other evidence. Bill Halliman – who was 

involved in the creation of the Third Amendment – testified that the Third Amendment 

was a way for GLI and Viad to share the risks of leaking USTs at the properties sold to 

GLI, but was never intended to cover environmental contamination other than tank leaks. 

Ken Ries also testified that Viad’s liability arose under the Third Amendment only when 

a tank leak was confirmed. 
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 Viad’s interpretation is further supported by the fact that the environmental 

provisions of the Third Amendment arose from a specific issue – concern about UST 

contamination at the properties. Section 3.1 states that “[t]he Parties desire to make 

certain arrangements with respect to certain underground storage tanks on properties 

owned by GLI[.]” Ex. 3, § 3.1. Section 3.2 makes clear that GLI is responsible for 

“testing, repairing or replacing any of the Tanks.” Id., § 3.2. Section 3.3 establishes the 

parties’ respective responsibilities for contamination resulting from the tanks – for 

“remediation done in respect of leaks from the Tanks.” Id., § 3.3. 

 Given this evidence, the Court cannot accept GLI’s argument that Viad was 

responsible for all contamination at a property where GLI gave notice of a liability, 

regardless of whether the contamination related to a UST leak. The contract context and 

language, the parties’ communications and course of dealing, and the testimony of 

individuals involved in the drafting and implementation of the Third Amendment all 

show that Viad was liable only for environmental contamination tied to a UST leak of 

which it was notified.6

 

GLI makes a second argument from the language of § 3.3 of the Third 

Amendment. It notes that § 3.3 refers to Viad’s proportionate share of the cost “with 

respect to any Tank location.” Id. (emphasis added). GLI argues that the word 

“location” shows that Viad’s duties applied to “locations” – to properties where tanks 

were located – not just to areas of immediate releases from tanks. This argument is not 

 

6

 To be sure, GLI presented evidence to the contrary in the form of testimony and exhibits. But the Court finds the testimony of Viad’s witnesses, particularly Mr. Ries and Mr. Halliman, more credible. This is due in part to the fact that they, unlike the GLI witnesses, were on scene when the relevant contracts were negotiated, documented, and implemented, and due in part to their general demeanor and believability while testifying. GLI’s witnesses were less believable during their testimony. The Court also finds that a 

preponderance of the documentary evidence favors Viad’s position even though some exhibits can be read to support GLI’s view. One might reasonably ask how Viad’s liability was limited to UST leaks when the definition of “Environmental Obligations” in the Settlement Agreement is much broader. The definition is indeed broad, but the 

Settlement Agreement specifically states that Viad’s liabilities “continue to be governed by the Amended Acquisition Agreement” (Ex. 5, § 3.1(a)), which includes the Third 

Amendment (id., § 1.2). Thus, the Third Amendment, which was limited to UST leaks 

for all the reasons identified above, remained the controlling agreement. 
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persuasive. The relevant sentence reads as follows: “the proportionate share of 

Remediation Expenses to be paid by [Viad] with respect to any Tank location shall be 

determined upon the earlier of (a) such time as GLI . . . undertakes . . . remediation” or 

(b) a government agency gives notice to Viad. Ex. 3, § 3.3 (emphasis added). If 

“location” means an entire property as GLI contends, then Viad’s percentage of liability 

for a particular property would be fixed when GLI first provided notice of contamination 

and would remain in place for all subsequent contamination found at the property. And 

yet the parties clearly did not follow such an approach. In a letter to Viad dated 

January 24, 2000, GLI noted that the Cleveland property included “a 40% reimbursement 

allocation for work connected to the waste oil release” and a 100% allocation for ongoing 

“remediation activities . . . related to the original release of diesel fuel in the 1980s.” 

Ex. 220. This shows that Viad’s liability varied as different UST leaks were found. 

Viad did not become liable for all contamination at a property when the first 

contamination was found. The words “Tank location” in § 3.3 thus mean the area 

affected by the leaking tank. 

In summary, the Court finds and concludes that Viad’s liability under the Third 

Amendment is limited to leaks from USTs. 

4. Steps to Trigger Liability. 

Viad contends that three steps were required to trigger its liability. The Court 

agrees. First, GLI had to give reasonable written notice of the UST contamination to 

Viad. The notice requirement appears in § 3.3 of the Third Amendment and was later 

refined in the Settlement Agreement. That agreement provided that GLI was responsible 

for “all Environmental Obligations with respect to all Properties, except for 

Environmental Obligations which [Viad was] Notified about prior to [March 1, 1992].” 

Ex. 5, §§ 2.5, 3.1. “Notified” was defined to require that “the existence or nature of the 

Environmental Obligation has been reasonably disclosed in writing.”7

 Id., § 2.4. Thus, 

 

7

 The full definition of “Notified” also includes notice to Viad by a state or federal regulators or Viad’s performance of site assessment, testing, or remediation work at a 

property. Id., § 2.4. GLI does not argue that Viad received notice by these means. 
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Viad’s liability for an Environmental Obligation arose only if GLI provided reasonable 

written notice before March 1, 1992. 

Second, a UST leak had to be confirmed. The Third Amendment provided that 

Viad was liable for “remediation done in respect of leaks from the Tanks” (Ex. 3, § 3.3), 

and, as discussed above, the parties’ course of dealing made clear that a tank leak had to 

be confirmed before Viad was liable for any share of the site costs (Exs. 15, 261; see 

also Exs. 577, 579; Testimony of Ries and Halliman). 

Third, GLI had to commence remediation activities. The Third Amendment stated 

that Viad’s liability “shall be determined upon the earlier of (a) such time as GLI . . . 

undertakes, or requests [Viad] to undertake, such remediation . . . or (b) upon 

notification of GLI . . . by any governmental entity of the probable imposition of any 

fines, penalties or governmental levies or the demand to remediate the property or repair 

or replace the Tanks.” Ex. 3. § 3.3 (emphasis added). The parties presented no evidence 

that the second condition – a government enforcement action – occurred at the Seattle 

Property, so the relevant requirement was the commencement of remediation work at the 

site. The fact that GLI understood this prerequisite is shown by its scramble to start work 

at the Seattle Property before the end of the 60% contribution year. Ex. 172, 600. 

 5. Did GLI Trigger Viad’s Liability for All Seattle Contamination? 

 GLI contends that its June 12, 1989 letter notifying Viad of hydrocarbon 

contamination at the Seattle Property was sufficient to trigger Viad’s 60% liability for all 

subsurface contamination later found at the Property, even if some of that contamination 

was found after the cut-off date of March 1, 1992. For several reasons, the Court does 

not agree. 

 First, § 14(a) of the Claims Treatment Agreement, as modified by the Settlement 

Agreement, provides that “[Viad] shall have no obligation to indemnify [GLI] for any 

liabilities for Environmental Obligations with respect to Properties, regardless of when 

the acts giving rise to liability occurred, and [GLI] shall assume all such Environmental 

Obligations and indemnities with respect to all Properties, except (A) indemnities arising 
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from Environmental Obligations which [Viad was] Notified about prior to [March 1, 

1992].” Ex. 5, ¶ 3.1. This provision places primary responsibility for Environmental 

Obligations on GLI, and limits the obligations of Viad to those of which it was notified 

before March 1, 1992. Nothing in § 14(a) suggests that Viad is liable for Environmental 

Obligations for which it received no notice, provided those obligations arose at a property 

where Viad had been notified of other Environmental Obligations before the deadline. 

 The Seattle Property had several different kinds of contamination, including diesel 

fuel, gasoline, lube oil, hydraulic oil, waste oil, and chlorinated solvents, in different but 

sometimes overlapping plumes. See Ex. 295, Fig. 9. These plumes represent different 

releases from different sources at the site. The Court cannot read § 14(a) to mean that if 

Viad was on notice for one of these Environmental Obligations it was on notice for all – a 

kind of “in for a penny, in for a pound” requirement. Such an interpretation runs contrary 

to the provision’s careful placement of primary environmental responsibility on GLI, 

with the sole exception being Viad’s liability for Environmental Obligations of which it 

received notice by March 1, 1992. Viad received no notice before that date of gasoline, 

lube oil, hydraulic oil, waste oil, or chlorinated solvent contamination, as will be 

discussed in more detail below. 

 Second, if notice of one kind of contamination at a property was sufficient to make 

Viad liable for all kinds of contamination at the property, then a single percentage under 

the Third Amendment would apply at each property. In fact, that is what GLI claims in 

this case – that its June 12, 1989 notice locked Viad into a 60% allocation for all 

contamination eventually found at the Seattle Property. As noted above, however, GLI’s 

letter to Viad regarding the Cleveland property noted “a 40% reimbursement allocation 

for work connected to the waste oil release” and a 100% allocation for ongoing 

“remediation activities . . . related to the original release of diesel fuel in the 1980s.” 

Ex. 220. This letter disproves GLI’s position. Notice of the diesel contamination at the 

Cleveland property did not lock in a 100% allocation for all contamination eventually 

found at the property. The waste oil contamination was subject to a 40% allocation when 
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it was discovered and properly noticed. Ken Ries confirmed this understanding of the 

Cleveland letter during his testimony.8

 Third, GLI did not complete the steps needed to trigger Viad’s liability for most of 

the contaminants at the Seattle Property. Not only did GLI fail to give written notice of 

the other contaminants before the cut-off date, but written notice was only one of three 

required steps. A leaking UST also had to be confirmed. Exs. 15, 261; 577, 579; 17. 

Evidence at trial demonstrated that gasoline, lube oil, hydraulic oil, and chlorinated 

solvents were never tied to any specific UST leak. Waste oil was found in the vicinity of 

the waste oil Tanks 9 and 10, but GLI presented no evidence that those tanks were 

confirmed to be leaking, and surface activities in the vicinity of the tanks very well could 

have caused the contamination. Indeed, chlorinated solvents – which Mr. Jewitt said 

were likely related to the waste oil – were found in soil above the tanks, suggesting 

surface releases. 

 In addition, remediation work had to begin at a property before Viad’s liability 

would attach. See Ex. 3, § 3.3; Exs. 172, 600; see also Ex. 513 (letter from Viad to GLI 

stating that “the allocation percentage is assignable upon undertaking remediation or 

being required by the state to undertake remediation, and not by the discovery of the 

problem itself”). And yet remediation work related to gasoline, lube oil, hydraulic oil, 

waste oil, and chlorinated solvents did not begin at the Seattle Property until after the 

liability cut-off date of March 1, 1992. 

 Fourth, the parties understood that contamination from sources other than UST 

leaks could not be assigned to Viad. Bill Halliman and Ken Ries testified credibly that 

this was the parties’ understanding and course of dealing, and the language and context of 

the Third Amendment confirm this understanding. See also Exs. 501-503. GLI failed to 

present evidence that gasoline, lube oil, hydraulic oil, waste oil, or chlorinated solvent 

contamination at the site resulted from UST leaks. 

 

8

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 In sum, the Court cannot accept GLI’s claim that the June 12, 1989 letter 

regarding general hydrocarbon contamination triggered Viad’s liability for 60% of all 

subsurface contamination eventually found at the Seattle Property.9

 

 6. Nature and Timing of the Seattle Contamination. 

 The June 12, 1989 letter mentioned only “hydrocarbon contamination in the soil 

and groundwater.” Ex. 15. It did not tie the contamination to any leaking UST. Id. In 

March 1990, GLI had a Tracer tank tightness test performed. The test found vapor leaks 

in an antifreeze UST (Tank 2) and a diesel UST (Tank 7) in the northwest portion of the 

Property. Ex. 595. In a March 15, 1990 letter to state regulators, GLI characterized these 

leaks as “a vapor leak, or a small or intermittent leak.” Ex. 597. In a letter the same day 

to Viad, GLI identified the leaks as relating to diesel and antifreeze tanks. Ex. 17. In 

response, Viad accepted responsibility for 60% of the costs associated with the leaks. 

Ex. 20. The parties agree that the antifreeze leak did not create contamination at the 

Seattle Property that required any cleanup efforts. 

 In January 1992, Tracer performed another UST test at the Seattle Property. 

Tank 7, which had shown only a vapor leak in 1990, failed the 1992 test. Ex. 607. GLI 

notified state regulators of this failure and stated that it would immediately take Tank 7 

out of service, but GLI never notified Viad. Ken Ries testified that he never saw a copy 

of the UST failure report before this litigation began. The 1992 failure appears to have 

been much more substantial than the 1990 vapor leak because GLI also discovered 

significant diesel contamination in the area of Tank 7 in 1992, including “free product,” 

which is pure diesel fuel in the soil or floating on the groundwater. 

 

9

 Former GLI in-house attorney Michael Crim testified at trial on the basis of his 

own knowledge. Viad objected to much of this personal testimony on the ground that Crim invoked the attorney-client privilege during his deposition and declined to provide information he later provided at trial (as opposed to his Rule 30(b)(6) testimony, which was given in deposition and to which Viad does not object). Near the end of trial, the parties provided the Court with their respective written positions on which of Mr. Crim’s 

answers were appropriate. Because the Court finds that Mr. Crim’s testimony does not alter the decision in this case even if all of it is considered, the Court need not undertake a 

question-by-question ruling on what answers were appropriate. 
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 Thus, before the liability cut-off date of March 1, 1992, GLI notified Viad of a 

vapor leak in one diesel tank. GLI did not inform Viad of the more substantial diesel 

tank failure in 1992. 

 The Court finds that GLI was not aware of other kinds of contamination at the site 

before March 1, 1992. A letter to state regulators dated February 27, 1992 explained that 

GLI had “conducted a comprehensive site assessment to define the extent of soil and 

groundwater contamination,” and yet reported only diesel contamination. Ex. 607. In a 

letter to Viad later that year, GLI said that it had been “actively pursuing soil and 

groundwater clean-up efforts” at the Seattle Property, and had defined “the vertical and 

horizontal parameters of the contamination.” Ex. 275. Again, the letter mentioned only 

diesel contamination. Other kinds of contamination were discovered later. 

 Lube Oil. Lube oil was present in soil at the Property when it was sold to the City 

of Seattle in 2009. Ex. 295, Fig. 9. GLI’s environmental expert, Peter Jewitt, testified 

that the lube oil was not discovered before March 1, 1992, and GLI has stipulated that it 

did not notify Viad of lube oil contamination before that date. Doc. 124, ¶ 24. 

 Hydraulic Oil. Hydraulic oil was also present in soil at the Property when it was 

sold to the City. Ex. 295, Fig. 9. GLI presented no evidence that this contamination was 

discovered before March 1, 1992, and GLI’s expert stated no opinion on when hydraulic 

oil was first released or discovered. 

 Waste Oil. Waste oil was present in soil at the Property when it was sold to 

Seattle. Ex. 295, Fig. 9. GLI did not identify waste oil contamination at the site until the 

summer of 1992 when it closed Tanks 9 and 10 at the Property. Exs. 276, 48. The Court 

cannot find that the waste oil was discovered by earlier tests that simply reflect 

undifferentiated petroleum contamination at the site. Viad’s expert witness, Thomas 

Schruben, testified that waste oil contamination was not found at the site until the waste 

oil tanks were closed in mid-1992, after the liability cut-off date. And remediation of the 

waste oil did not begin until September 1993. Ex. 50. GLI introduced no evidence of 

any notice to Viad regarding waste oil contamination before the cut-off date. 
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 Gasoline. A large plume of gasoline contamination was present at the Property 

when it was sold to Seattle. Ex. 295, Fig. 9. The Court finds that this contamination was 

not discovered by GLI until 2008. The gasoline contamination was first found in a site 

assessment conducted by consultants for the City of Seattle that year. Ex. 295. An 

internal GLI document written in 2009 stated that the gasoline contamination was first 

discovered in 2008. Ex. 666 at 1. The same document observed that “[i]t is the 

remediation of carcinogenic compounds found in gasoline which is driving the cost of 

future remediation for this site.” Id. Further, GLI’s environmental consultant, ATC, 

stated in a Rule 30(b)(6) deposition that it tested for known contaminants at the site, but 

that it did not test for gasoline in 2007, suggesting that gasoline was not a known 

contaminant of the Property in 2007. 

 The Court also finds that GLI did not give Viad notice of gasoline contamination 

at the site before March 1, 1992. The Court cannot accept GLI’s argument that the 

mention of BTEX in some environmental reports provided notice to Viad of the gasoline 

contamination. As Ken Ries and expert Thomas Schruben testified, BTEX is also found 

in diesel fuel, which for years was the primary contaminant of concern at the Property. 

GLI’s expert, Peter Jewitt, opined that BTEX found at the site was indicative of gasoline, 

but ATC, GLI’s on-site consultant, testified in a Rule 30(b)(6) deposition that it knew of 

the BTEX at the site but was not aware of gasoline contamination. The Court finds that 

detections of BTEX did not put Viad on notice of gasoline contamination.10

 Chlorinated Solvents. TCE, TCA, and PCE were detected at the Seattle Property, 

but not before March 1, 1992. PCE and TCA were detected when the waste oil tanks 

 

10 The parties spent time during trial addressing possible sources of the gasoline contamination. GLI and Viad witnesses testified that neither company used gasoline at the site. A report of the City’s consultant noted that gasoline tanks had been used at the facility in the 1930s and 1940s, before Viad’s operations. Ex. 666 at 1. GLI’s internal 

communications also noted the existence of possible off-site sources. Id. The Court 

finds, however, that the source of the gasoline contamination is irrelevant. The contracts 

made GLI liable for all contamination, from whatever source, unless it took the three 

steps outlined above before March 1, 1992. The Court finds that GLI did not take those 

steps with respect to gasoline. (The Court notes that it did not rely on Ex. 303 – the admissibility of which was hotly contested at trial – in reaching this conclusion or any conclusion in this case.) 
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were closed in July 1992. Ex. 276. TCE was detected in low concentrations during field 

work in September and October 1993. Ex. 50. Remediation of the area where PCE and 

TCA were found began in September 1993. Id. GLI introduced no evidence that it ever 

advised Viad of chlorinated solvent contamination at the Property.11

 7. Contract-Related Findings. 

 The Court finds that GLI did not discover the gasoline, lube oil, hydraulic oil, 

waste oil, or chlorinated solvent contamination before March 1, 1992, did not give notice 

of that contamination to Viad before the deadline, did not link the contamination to a 

leaking UST, and did not begin remediating the contamination before the deadline. Viad 

therefore is not liable under the Third Amendment and the other agreements for this 

contamination. 

 Diesel contamination is more complicated. GLI gave Viad notice of a vapor leak 

in a diesel tank and started remediation work before March 1, 1992, leading to Viad’s 

acceptance of 60% liability. But GLI did not give Viad notice of the larger diesel leak 

discovered in 1992, although it did mention free product remediation in a letter to Viad 

that year, as discussed below. The Court finds that this was not reasonable written notice 

of the larger tank leak before the deadline, and that GLI cannot recover remediation costs 

related to that larger leak. But even if the Court were to find that GLI took the steps 

necessary to trigger Viad’s liability for all diesel contamination at the site, GLI has 

provided no basis for the Court to determine what portion of the $5.95 million price 

reduction was due to diesel contamination as opposed to other forms of contamination. 

The Court therefore could not award GLI damages for the diesel remediation alone.12

 In short, GLI cannot prevail on its claim for breach of contract. GLI has not 

shown that it satisfied conditions precedent under the contracts. The Court also finds that 

 

11 The Court cannot accept Peter Jewitt’s suggestion that notice of hydrocarbon contamination near the waste oil tanks somehow constituted notice of chlorinated solvent 

contamination. 

12 Nor does GLI assert that any portion of the additional $46,050.85 it seeks to 

recover was due to diesel contamination. 
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because GLI did not take the steps necessary to trigger Viad’s liability under the 

contracts, Viad did not prevent GLI from receiving the benefits of those contracts. GLI 

therefore cannot prevail on its claim for breach of the covenant of good faith and fair 

dealing. In light of these rulings, the Court need not reach Viad’s statute of limitations 

defense. 

III. GLI’s CERCLA and MTCA Claims. 

 GLI seeks to recover the full $5.95 million price reduction under the MTCA, and 

$196,350 for chlorinated solvent contamination under CERCLA (CERCLA does not 

cover petroleum contamination). Both parties agree, and the Ninth Circuit has 

confirmed, that private agreements can allocate liability under CERCLA. JonesHamilton Co. v. Beazer Materials & Servs., Inc., 973 F.2d 688, 692 (9th Cir. 1992) 

(“enforcement of the indemnification agreement would not violate public policy under 

CERCLA”). Although any responsible party may be liable to the government under 

CERCLA, courts will enforce contractual allocations of liability between private parties. 

Id. Similarly, Washington courts have found that private parties can contractually 

allocate MTCA liability. See Car Wash Enterprises, Inc. v. Kampanos, 874 P.2d 868, 

873 (Wash. 1994) (MTCA does not “prohibit private parties from allocating MTCA clean 

up liability between themselves”). 

 The Court finds that GLI’s claims under CERCLA and the MTCA are foreclosed 

by the parties’ contracts. After setting forth the procedure under which Viad can be made 

liable for a percentage of remediation expenses, the Third Amendment states: “[GLI] 

shall be obligated to bear the remaining share of the Remediation Expenses.” 

Ex. 3, § 3.3. This would include a 100% share after March 1, 1992. Id. 

 The Settlement Agreement is even clearer. It defines “Environmental 

Obligations” to include CERCLA and “any other state or federal statute,” which would 

include the MTCA. Ex. 5, § 2.1. The Settlement Agreement then provides: 

[Viad] shall have no obligation to indemnify [GLI] for any liabilities for 

Environmental Obligations with respect to the Properties, regardless of 

when the acts giving rise to liability occurred, and [GLI] shall assume all 
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such Environmental Obligations and Indemnities with respect to all 

Properties, except (A) indemnities arising from Environmental Obligations 

which [Viad was] notified about prior to [March 1, 1992]. 

Id., § 3.1. 

 As discussed above, the language of the contracts and the parties’ course of 

dealing made clear that Viad’s liability arose only upon (1) reasonable written notice, 

(2) of a UST leak, and (3) the start of remediation before March 1, 1992. GLI did not 

satisfy these requirements with respect to gasoline, lube oil, waste oil, hydraulic oil, and 

chlorinated solvent contamination, and most of the diesel contamination, and does not 

seek any recovery under CERCLA or the MTCA for the 1990 diesel vapor leak for which 

these requirements were satisfied. As a result, under the parties’ agreements, GLI bears 

full liability for the Seattle contamination, including CERCLA and MTCA liability. The 

Court will enforce this contractual allocation of liability. Jones-Hamilton Co., 973 F.2d 

at 692; Car Wash Enterprises, 874 P.2d at 873. GLI cannot recover anything from Viad 

under its statutory claims. 

 Even if the Court were to find that the contracts did not limit GLI’s CERCLA and 

MTCA claims, it could not conclude that the $5.95 million purchase price reduction is 

recoverable under CERCLA or the MTCA. GLI has not shown that the contaminants 

addressed in the price reduction were released during Viad’s operation of the Property. 

Although it is possible that releases occurred during Viad’s operations, GLI bears the 

burden of proof on this issue and did not show by a preponderance of the evidence that 

releases occurred while Viad operated the site. The Court found Viad experts Steve 

Johnson and Tom Schruben to be as credible as GLI expert Peter Jewitt on this issue. 

And the evidence shows that gasoline, lube oil, and hydraulic oil were not found at the 

property until 2008, more than 20 years after Viad operations ceased. Nor were the 

sources of these contaminants ever identified. The significant diesel contamination at the 

site likely came from Tank 7, but the evidence suggests that the substantial releases from 

this tank occurred during GLI’s operation. Free product diesel was not found until 1992, 
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about the time Tank 7 failed, and GLI itself noted that tests of the USTs before June 1989 

showed the tanks to be tight. Ex. 15. Finally, as Tom Schruben noted, the chlorinated 

solvent contamination on the southern part of the property appears more likely to have 

been released by activities at the site than UST leaks. GLI continued those operations 

after it acquired the property. 

In addition, the Court cannot determine what cleanup costs were actually paid by 

the $5.95 million purchase price reduction. That number was a negotiated compromise 

between GLI and the City of Seattle, and the numbers from which the City was 

negotiating included many costs unrelated to contamination for which Viad could be 

liable, such as redevelopment costs. The Court also finds Viad’s expert Steve Johnson 

more persuasive than Peter Jewitt on the question of whether the remediation conducted 

by the City complied with the NCP for CERLCA purposes and was the substantial 

equivalent of a department conducted or supervised remedial action for MTCA purposes. 

The Court concludes that neither requirement was satisfied, particularly due to the lack of 

a feasibility study. 

Because they are barred by the contracts and because their elements were not 

established by the evidence, the Court concludes that GLI cannot prevail on its claims for 

cost recovery under CERCLA or the MTCA. 

IV. Viad’s Breach of Contract Claims.

 Viad seeks to recover $547,177 it paid to GLI between January 29, 1992 and 

2009. Exs. 735, 736. Viad claims that GLI breached the parties’ contracts when it billed 

Viad for these amounts. Even if the Court could conclude that GLI breached the parties’ 

agreements by these billing, it could not find for Viad. This is because at least a portion 

of Viad’s claim is time-barred, and Viad has provided no basis for the Court to 

distinguish between timely and untimely claims. 

A. Legal Standards. 

 When evaluating whether breach of contract claims are barred by the statute of 

limitations, Arizona law applies the discovery rule. Gust, Rosenfeld & Henderson v. 
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Prudential Ins. Co. of Am., 898 P.2d 964, 967-68 (Ariz. 1995). “Under the discovery 

rule, a plaintiff’s cause of action does not accrue until the plaintiff knows or, in the 

exercise of reasonable diligence, should know the facts underlying the cause.” Id. at 966. 

The discovery rule arises from a desire for fairness: “it is unjust to deprive a plaintiff of a 

cause of action before the plaintiff has a reasonable basis for believing that a claim 

exists.” Id. at 967. Statutes of limitations are intended to protect defendants from stale 

claims where plaintiffs have slept on their rights, but “[a] blamelessly uninformed 

plaintiff cannot be said to have slept on his rights.” Walk v. Ring, 44 P.3d 990, 995-96 

(Ariz. 2002).

 The key “inquiry in applying the discovery rule is whether the plaintiff’s injury or 

the conduct causing the injury is difficult for plaintiff to detect.” Gust, 898 P.2d at 968. 

The rule “does not permit a party to hide behind its ignorance when reasonable 

investigation would have alerted it to the claim.” ELM Ret. Ctr., LP v. Callaway, 246 

P.3d 938, 941 (Ariz. Ct. App. 2010). This means that a party must “exercise[] reasonable 

diligence in monitoring the performance of another under the contract.” Gust, 898 P.2d 

at 969. “[T]he core question is whether a reasonable person would have been on notice 

to investigate.” Walk, 44 P.3d at 996. 

 Arizona tolls the running of a statute of limitations “when a party wrongfully 

conceals facts giving rise to the cause of action so as to prevent a potential plaintiff from 

reasonably discovering the claim’s existence during the limitation period.” Id. at 999. 

“In general, to toll the statute of limitations the fraud must prevent inquiry, elude 

investigation or mislead the party who claims the cause of action. The concealment must 

come after the injury, and there must be some affirmative act of the defendant calculated 

to obscure the existence of a cause of action.” Anson v. Am. Motors Corp., 747 P.2d 

581, 588 (Ariz. Ct. App. 1987) (internal quotation marks and citations omitted); Cooney 

v. Phoenix Newspapers, Inc., 770 P.2d 1185, 1187 (Ariz. Ct. App. 1989). 

 In this case, the parties agree that the breach of contract claims are subject to the 

six-year statute of limitations in A.R.S. § 12-548. Doc. 124, ¶ 7. Viad argues that its 
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claim to recover costs paid to GLI is not time-barred because it did not learn that GLI had 

billed it improperly until after GLI filed this lawsuit. Viad also contends that GLI 

intentionally concealed information that would have put Viad on notice that it was being 

wrongfully billed for remediation, tolling any limitations period. Because Viad seeks to 

recover payments it made to GLI more than six years before this lawsuit was filed, the 

only issues are when the limitations period commenced and whether it was tolled by 

GLI’s alleged fraud. 

B. Findings and Conclusions. 

 GLI argues that Viad received regular information from GLI about the costs GLI 

was seeking to recover from Viad for the Seattle Property and other properties covered by 

the parties’ contracts; Ken Ries – the person reviewing and approving the invoices for 

Viad – held a PhD in environmental engineering and understood what was occurring at 

each of the properties; Ries kept careful records about each property where Viad was 

liable for contamination, was not shy about making inquiries when more information was 

needed, and even visited sites when necessary; and GLI responded cooperatively to 

requests for more information from Viad. From these facts, GLI argues that Viad was on 

notice of the nature of the costs it was paying and cannot claim that the start of the 

limitations period was delayed under the discovery rule. GLI also emphasizes that a 

party to a contract must “exercise[] reasonable diligence in monitoring the performance 

of another under the contract.” Gust, 898 P.2d at 969. Because Viad had access to 

whatever information it needed and paid 387 invoices over the course of more than 25 

years for the Seattle Property, GLI argues that Viad was long ago on notice of any 

overpayments and should have made its claim much earlier than 2015. 

 Viad argues that GLI failed to disclose that it was billing Viad for costs related to 

a diesel leak it had not disclosed, waste oil, and chlorinated solvent contamination at the 

Property. Viad notes that invoices sent by GLI failed to identify the specific work done 

or the location of the work on the Property. Viad argues that GLI never informed it of 

the larger diesel UST leak found in 1992, contamination found during the closure of 
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waste oil tanks in the summer of 1992, or contamination discovered in later years. Viad 

argues that Ken Ries was careful in overseeing Viad’s liability, even requiring GLI to 

assure Viad in its invoices that sums billed were properly allocable to Viad under the 

agreements. Ex. 618. Viad notes that June Weirich, who prepared most of the bills for 

GLI, testified that she had no basis for distinguishing between Seattle costs properly 

allocated to Viad and costs that should have been borne entirely by GLI, so she simply 

billed 60% of everything to Viad. 

 Viad seeks to recover $547,177, which represents all of the payments it made to 

GLI for the Seattle Property after January 29, 1992. When asked in closing arguments 

why it claimed that all payments after that date represented overpayments, Viad’s counsel 

asserted that the only leak Viad was informed about at the Seattle Property was the minor 

diesel tank vapor leak in 1990, and that GLI began billing Viad in 1992 for much more 

significant diesel contamination than could not have been caused by the vapor leak. Viad 

chose January 29, 1992 as the beginning date for overpayments because that is the date 

on which GLI notified state regulators of the more significant diesel tank leak. See 

Ex. 607. In other words, Viad draws a line between all costs incurred before the more 

significant diesel leak was found and all costs incurred after that date. 

 There is a problem in Viad’s line-drawing. Although it does appear that GLI 

failed to inform Viad of the January 1992 diesel tank leak, GLI did inform Viad of the 

diesel free product found around the time of that leak and GLI’s plan to remediate it with 

a 60% contribution from Viad. On August 17, 1992, GLI’s environmental manager 

wrote to Ken Ries and stated that GLI had been “actively pursuing soil and groundwater 

cleanup efforts at the Seattle garage for approximately one year.” Ex. 275. The letter 

specifically stated that this included “a free product ‘pump and treat’ recovery system” 

and regular groundwater monitoring “[a]ssociated with the free product recovery efforts.” 

Id. at 1 (emphasis added). As noted earlier, the presence of free product suggests 

significant contamination. The letter specifically stated that “the contaminant of concern 

is diesel fuel.” Id. Thus, as of August 1992, Viad knew that GLI had encountered free 
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product diesel fuel at the Seattle Property and intended to remediate it. The letter further 

stated that GLI would be excavating and removing soils near “the UST system with TPH 

concentrations above 5,000 ppm.” Id. This advised Viad that GLI was remediating 

significant soil contamination as well. 

 The letter explained that GLI had investigated a bioventing remediation system for 

the diesel contamination and estimated that it would cost $276,000 to implement, which 

was less costly than alternative remediation systems. Id. at 2. The bioventing would be 

run “in conjunction with the existing groundwater treatment system.” Id.

 The letter noted that GLI’s environmental engineer had discussed these plans with 

Ken Ries, and that Ries initially said Viad would not pay 60% of the bioventing cost 

because it was an unproven technology. Id. GLI’s letter enclosed a report regarding the 

technology and asked Viad to reconsider. Id.

 Viad did reconsider. On September 4, 1992, Ken Ries wrote to GLI and said 

“[Viad] hereby accepts your plan to undertake a bioventing remediation at the [Seattle] 

site. It is my understanding that you anticipate the bioventing remediation plan to cost 

[Viad] 60 percent of an estimate[d] $276,000 over the next 24 months.” Ex. 25. Mr. 

Ries then submitted an internal request for $166,000 to cover Viad’s share of the 

bioventing system at the Seattle Property. Ex. 26. Attached to Ries’s internal request 

was the GLI letter mentioning free product at the Seattle site, as well as a report from 

GLI’s consultant regarding the bioventing remediation plan. The report stated that “[t]his 

work was initiated after a 1991 site assessment at the facility revealed petroleum 

hydrocarbon contamination in soils and groundwater exceed Washington Department of 

Ecology cleanup levels.” Id., page CIAD0014771. 

 From these documents, it is clear that Viad knew in the second half of 1992 that 

GLI was undertaking a significant diesel remediation effort at the Seattle Property. Viad 

knew that the contamination included free product diesel fuel and soil contamination 

above 5,000 parts per million. This is far more serious contamination than could have 

been caused by the 1990 vapor leak of which Viad had received notice. Indeed, Viad 
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asserted in closing arguments that the right place to draw the line was between the “de 

minimis” 1990 vapor leak and the significant diesel contamination evident at the site in 

1992. See also Doc. 120, ¶ 79. Viad expert Tom Schruben testified that the diesel-tank 

vapor leak found in 1990 was minimal, and that most of the diesel contamination cleanup 

costs were unrelated to that leak. And yet Viad knowingly agreed to pay for remediation 

of the significant diesel contamination at the site. 

 None of this happened before the liability deadline of March 1, 1992, so the Court 

cannot conclude that Viad had sufficient notice from these communications to make it 

liable under the Third Amendment for all future diesel remediation. But Viad was on 

notice that it was paying for remediation of substantially greater diesel contamination 

than could have been caused by the 1990 vapor leak. This information was sufficient to 

trigger the running of the statute of limitations. Viad knew that GLI had not given it 

written notice of the source for the substantial diesel contamination at the site, and 

therefore had reason to believe it was being billed improperly. If Viad was going to 

complain about this improper billing – this breach of contract – Arizona law required that 

Viad do so within the next six years. 

 As noted above, the key “inquiry in applying the discovery rule is whether the 

plaintiff’s injury or the conduct causing the injury is difficult for plaintiff to detect.” 

Gust, 898 P.2d at 968. The fact that GLI was billing Viad for work not related to the 

1990 vapor leak was not difficult to detect. Furthermore, a party must “exercise[] 

reasonable diligence in monitoring the performance of another under the contract.” 

Id. at 969. No extraordinary monitoring was required here. GLI plainly told Viad that it 

was remediating free product diesel and soil contamination at a cost of more than a 

quarter million dollars, and invited Viad to pay its share. Viad agreed, at a cost of 

$166,000. The Court concludes that a reasonable person in Viad’s position would have 

been on notice to investigate. Walk, 44 P.3d at 996. As a result, the discovery rule was 

satisfied in 1992 and the limitations period began running. Viad’s claim for overpayment 

was time-barred long before Viad asserted its counterclaim in 2015. 
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 Nor can the Court find that the limitations period was tolled by intentional 

concealment on the part of GLI. GLI informed Viad that it was remediating free product 

diesel and substantial soil contamination at the site, and the evidence at trial showed that 

Viad had the ability to obtain more information from GLI and its consultants when Viad 

wanted it. The Court cannot conclude that GLI prevented inquiry, eluded investigation, 

or misled Viad with respect to the contamination it was remediating. Anson, 747 P.2d at 

588. Because the statute of limitations was not tolled, Viad’s claim for repayment of 

costs incurred to remediate the diesel contamination is untimely. 

 This time-bar dooms Viad’s entire counterclaim. Even if the Court could find that 

the discovery rule was not triggered for Viad’s reimbursement claims relating to gasoline, 

lube oil, hydraulic oil, waste oil, or chlorinated solvent contamination, Viad has provided 

no basis for the Court to separate such overpayments from amounts it paid for 

remediating diesel contamination.13 

 Viad has the burden of proving its damages with reasonable certainty. Gilmore v. 

Cohen, 386 P.2d 81, 82 (Ariz. 1963). Viad has not done so with respect to non-diesel 

contamination. It simply seeks to recover 100% of the payments it made to GLI after 

January 29, 1992. Because Viad has failed to prove the amount of any timely claims, it 

has failed to prove its counterclaim. 

 Viad asserts a defense of recoupment, and argues that the defense is not subject to 

the statute of limitations. “[R]ecoupment is an equitable doctrine which can be used to 

reduce or eliminate a judgment, but not for affirmative relief.” Ness v. Greater Arizona 

Realty, Inc., 572 P.2d 1195, 1198 (Ariz. Ct. App. 1977). If GLI had recovered a 

judgment against Viad in this case, recoupment might be available to reduce that 

 

13 The Court notes that most of the money Viad paid after 1992 likely went to diesel remediation. Gasoline, lube oil, and hydraulic oil contamination were not even found until 2008 and therefore were not part of the costs at issue. And although some remediation steps were taken with respect to the waste oil tanks and chlorinated solvents 

in 1993, Viad has provided no evidence regarding the amount it paid for remediation of these contaminants between 1992 and 2009. 
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judgment. But because GLI has not recovered a judgment, recoupment is not available. 

It is not a source of affirmative relief for Viad. Id.

IT IS ORDERED: 

1. The Court finds in favor of Viad and against GLI on GLI’s claims for 

breach of contract, breach of the covenant of good faith and fair dealing, 

CERCLA, and the MTCA, and orders that GLI take nothing on those 

claims. 

 2. The Court finds in favor of GLI on Viad’s counterclaim, and orders that 

Viad take nothing on the counterclaim. 

 3. Motions for attorneys’ fees, if any, shall be filed by June 30, 2017, and 

shall be limited to 17 pages, exclusive of attachments. Responses shall be 

filed by July 14, 2017, and shall be limited to 17 pages. Replies shall be 

filed by July 21, 2017, and shall be limited to 8 pages. 

 Dated this 30th day of May, 2017.