Court Opinion

ID: 9684529
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:59:54.85526+00
Date Added: 2024-06-11T18:17:56.729803
License: Public Domain

Ray Thornton, Justice, dissenting. I dissent from the tice, opinion because I believe that without a requirement that the award be spent on remediation of the property, an award of $180,000.00 is disproportionate to the $31,500.00 full market value of the property. The court’s holding in State v. Diamond Lakes Oil Co., 347 Ark. 618, 66 S.W.3d 613 (2002), is good law. When the Arkansas Department of Environmental Quality (“ADEQ”) orders a remediation of polluted property, the damage to that property is temporary by virtue of the possibility of remediation. The present case, however, is distinguishable from Diamond Lakes, and I believe the majority does a disservice to our prior holding. Diamond Lakes, supra, is premised on a clean-up mandated by the ADEQ. We stated that the damages were temporary because the ADEQ “mandated” the clean-up. Furthermore, it was the fact that Diamond Lakes did not have a choice but to clean-up the polluted site that factored into our holding that the cost of repair was not grossly disproportionate to the value of the property. In Diamond Lakes, supra, we said, “The argument [that the damages award is disproportionate to the value of the site] ignores the fact that it was ADEQ that ordered the remediation; Diamond Lakes had no discretion in the process.” (footnote omitted). Here, I would hold that, absent a mandate to spend the money on remediation, the damages are not temporary but rather permanent and cannot exceed the fair market value of the damaged property. The State of Arkansas is the final purse from which the money will flow. The State administers the Arkansas Petroleum Storage Tank Trust Fund. See Ark. Code Ann. § 8-7-901 et seq. (Supp. 2001). For this reason, I believe it is instructive to look to the intent of the legislature in establishing the trust fund. The fund was created to assist the ADEQ in maintaining the environment and remediating any damage caused by petroleum leaks from underground storage tanks. See Ark. Code Ann. § 8-7-905 (d). The trust fund will indemnify the cost of remediation as ordered by the ADEQ up to one million dollars for accidental releases. See Ark. Code Ann. § 8-7-907. Furthermore, the Trust Fund will indemnify oil companies for damage awards paid to third parties from an accidental discharge. Ark. Code Ann. § 8-7-908. In this case, though Felton Oil may initially pay the award of $180,000.00 to Horace and Louise Gee, there is no assurance that the Gees will spend any of this windfall on a remediation of environmental damages to their property. No showing of remediation is required to obtain indemnification of Felton Oil by the trust fund. The plain language of the Arkansas Petroleum Storage Tank Trust Fund Act shows that the legislature intended to protect the environment from accidental petroleum leaks and to create an economically feasible manner for owners of underground storage facilities to offer recourse to third parties. In this case, the trust fund will be paying a large amount of money to private citizens on the grounds that the property needs further remediation. If this award were used to accomplish the goal of environmental remediation, then the temporary nature of the damages could properly support the award as a valid amount per Diamond Lakes, supra. Without any indication that the money will be used for remediation, the damage is permanent and Diamond Lakes no longer applies. Permanent injury to property is best remedied by compensation for the diminution in market value. I find the reasoning of the 8th Circuit Court of Appeals in BEI Defense Systems v. Highland Industrial Park, 357 F.3d 794 (8th Cir. 2004) to be persuasive. BEI noted that Arkansas measures damages according to whether the injury to real property is permanent or temporary. I believe that BEI, supra, accurately and succinctly describes the law of damages with relation to permanent impairment of property. I also believe that, absent some requirement that the damage award be spent on the remediation, the $180,000.00 in this case is disproportionate and excessive when compared to the market value of the property. The $25,000.00 awarded for discomfort and injury should remain undisturbed as a valid payment of a third-party claim for bodily injury caused by the release. See Ark. Code Ann. § 8-7-905(d)(3). This court has approved a damages award exceeding the value of property when the award is expended for the remediation of the property. Where, however, there is no assurance the award will be spent on the remediation, then any award should be based on the diminution of the value of the property. For the foregoing reasons, I respectfully dissent. I am authorized to state that Chief Justice Dickey joins in this dissent.