Court Opinion

ID: 9958332
Source: CourtListenerOpinion
Date Created: 2024-04-08 21:02:49.639103+00
Date Added: 2024-06-11T08:18:12.412284
License: Public Domain

SUPERIOR COURT
                                                     OF THE
                                        STATE OF DELAWARE

                                                                         LEONARD L. WILLIAMS JUSTICE CENTER
ERIC M. DAVIS                                                           500 NORTH KING STREET, SUITE 10400
JUDGE                                                                      WILMINGTON, DELAWARE 19801-3733
                                                                               TELEPHONE (302) 255-0960

                                                              April 8, 2024

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Christopher Viceconte, Esquire                                William M. Lafferty, Esquire
Gibbons P.C.                                                  Morris Nichols Arsht & Tunnell LLP
300 Delaware Avenue                                           Wilmington, Delaware 19801
Suite 1015
Wilmington, Delaware 19801

Re:     Ashland LLC, et al. v. The Samuel J. Heyman 1981 Continuing Trust for Lazarus S.
        Heyman, et al., C.A. No. N15C-10-176 EMD CCLD

Dear Counsel:

       This Letter Decision addresses: (i) Defendants/Counterclaim Plaintiffs’ Motion for
Judgment in Light of the Supreme Court’s Decision and (ii) Plaintiffs’ Cross-Motion for
Summary Judgment on Count I and V.1 The Court sets out the factual record of this civil action
in a number of its opinions. Because there are no material changes in the factual record, the
Court incorporates by reference the facts sections of those opinions for this decision.2 After
review of the cross-motions, the arguments of counsel at the hearing on the cross-motions and
review of additional submissions requested by the Court, the Court GRANTS in part and
DENIES in part the Heyman Parties’ motion and DENIES Ashland’s motion.

       On September 12, 2022,3 the Supreme Court reversed and remanded this Court’s
February 25, 2020 Opinion.4 The Heyman Parties filed a motion for judgment in light of the
Supreme Court’s Decision. Ashland opposed and moved for partial summary judgment. The
Court held a hearing on the motions on December 1, 2023. On February 19, 2024, the Court
requested supplemental submissions to clarify whether, excluding the Administrative Consent
Order (“ACO”), Ashland has incurred any monetary costs/expenses in connection with the

1
  Plaintiffs collectively will be called “Ashland,” and Defendants/Counterclaim Plaintiffs, the “Heyman Parties.”
2
  See, e.g., Ashland LLC v. The Samuel J. Heyman 1981 Continuing Tr. for Heyman, 2020 WL 1231100, at **1-10
(Del. Super. Ct. Feb. 25, 2020), rev’d and remanded sub nom. Samuel J. Heyman 1981 Continuing Tr. for Lazarus
S. Heyman v. Ashland LLC, 284 A.3d 714 (Del. 2022).
3
  Samuel J. Heyman 1981 Continuing Tr. for Lazarus S. Heyman v. Ashland LLC, 284 A.3d 714, 716 (Del. 2022).
4
  Ashland LLC, 2020 WL 1231100, at *13.
Linden Transfer due to liability under the Industrial Site Recovery Act (“ISRA”) or the Spill
Compensation and Control Act (the “Spill Act”).

       The main dispute of the cross-motions centers on part of SPA Section 2(f) to Schedule
5.19. The relevant portion of SPA Section 2(f) reads as follows:

         In connection with the Linden Transfer, the Seller Parties shall be responsible, at
         their sole cost and expense, for compliance, if applicable, with any requirements of
         the Industrial Site Recovery Act (“ISRA”) and, if ISRA applies to the Linden
         Transfer, Seller Parties shall (i) within five (5) Business Days after execution of
         this Agreement, make any required filings or notifications (such as a General
         Information Notice, as defined under ISRA) to the New Jersey Department of
         Environmental Protection (“NJDEP”), and (ii) use reasonable best efforts to, prior
         to closing, make all other filings, undertake all other measures, including where
         required undertaking any site investigation or Remedial Action required by ISRA.5

        Ashland argues that the Supreme Court did not resolve whether the first sentence of SPA
Section 2(f) modifies the allocation of liabilities in SPA Section 2(e). Further, it contends that
there is no genuine issue of material fact that the first sentence of SPA Section 2(f) mandates that
the Heyman Parties undertake pre-closing off-site remediation of the Linden Property. The
Court agrees with Ashland that the Supreme Court did not directly interpret the first sentence of
SPA Section 2(f).

        On remand, “the trial court must proceed in accordance with the mandate and the law of
the case as established on appeal.”6 While the mandate does not control a trial court as to
matters not addressed on appeal, the trial court is bound to strictly comply with the appellate
court's determination of any issues expressly or impliedly disposed of in its decision.7 The trial
court must take into “account the appellate court’s opinion and the circumstances it embraces”
and is required to “implement both the letter and the spirit of the mandate.”8

        “Delaware law adheres to the objective theory of contracts, i.e., a contract’s construction
should be that which would be understood by an objective, reasonable third party.”9 The
contract will be read as a whole, and each provision and term will be given effect.10 Delaware
courts “look to harmonize the entire agreement and remain consistent with the objective intent of
the parties that drafted the contract.”11 When the contract is clear and unambiguous, the Court
will give effect to the plain meaning of the contract's terms and provisions.12

       The Supreme Court did not directly interpret the scope of the first sentence of SPA
Section 2(f). The Supreme Court wrote that “the scope of compliance with the ISRA imposed on

5
  Heyman Defs.’ Mot. App. at HA3069 (D.I. No. 978); Ashland Mot. Transmittal Aff. Ex. 5, at 14 (D.I. No. 982).
6
  Ins. Corp. of Am. v. Barker, 628 A.2d 38, 40 (Del. 1993) (citation omitted).
7
  Id. (citing Piambino v. Bailey, 757 F.2d 1112, 1119 (11th Cir.1985) (citations omitted)).
8
  Id. (citing Bankers Trust Co. v. Bethlehem Steel Corp., 3rd Cir., 761 F.2d 943, 949 (1985) (citations omitted)).
9
  Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010).
10
   Kuhn Construction, Inc. v. Diamond State Port Corp., 2010 WL 779992, at *2 (Del. 2010).
11
   Land–Lock, LLC v. Paradise Prop., LLC, 2008 WL 5344062, at *3 (Del. Super. Dec. 23, 2008).
12
   Osborn ex rel. Osborn, 991 A.2d at 1159-60.

                                                         2
the Heyman Parties by Section 2(f), including whether it imposes any post-closing obligations at
all, are undeveloped in the record.”13 In addition, it wrote that the first sentence of SPA Section
2(f) is “of no help in ascertaining the meaning of the second sentence.”14 The rest of its
discussion then related to the obligations under the ACO.”15

        The plain language of SPA Section 2(f) will control. Here, the Heyman Parties agreed to
be responsible for “…any requirements of the [ISRA]” and to take certain steps if ISRA applies
to the Linden Transfer. This portion of SPA Section 2(f) does not reference the Linden Excluded
Liabilities which is made clear by the introductory clause of the next sentence in SPA Section
2(f) which makes that sentence an additional contractual obligation.

        The Court notes significant problems with Ashland’s claim under the first portion of SPA
Section 2(f). First, the Court finds that Ashland has failed to identify any damages arising under
ISRA or the Spill Act. Ashland states that it has incurred $4,026,305.57 in remedial costs. But
these costs arise under the ACO. While remedial costs may be recoverable under ISRA and the
Spill Act, Ashland does not dispute that the New Jersey Department of Environmental Protection
(“NJDEP”) has enforced the remedial obligations through the ACO––not ISRA or the Spill Act.
Therefore, the liability for any remedial costs arises under the ACO, and the appropriate
mechanism to determine the allocation of liability is through Section 2(e) to Schedule 5.19 of the
SPA. As held by the Supreme Court in its September 12, 2022 Decision, off-site liabilities under
the ACO fall on Ashland.16 Accordingly, because this liability arises under the ACO and the
parties have identified no damages that derive from ISRA or the Spill Act, Ashland’s ISRA and
Spill Act claims are not ripe for resolution and will be dismissed. Second, even if liability were
to arise under ISRA or the Spill Act, Ashland identifies no indemnification right to enforce
against the Heyman Parties pursuant to the SPA’s exclusive remedies provision, SPA Section
7.9. Without an indemnification right, Ashland has no remedy against the Heyman Parties over
any remedial costs that may arise under ISRA or the Spill Act at some point in the future.

       For these reasons, the Court will deny Ashland’s claims as to SPA Section 2(f) and the
Spill Act.

        The Court will also dismiss Ashland’s implied covenant of good faith and fair dealing
claim, because it is predicated on the existence of liability under ISRA or the Spill Act. In
addition, because the SPA is applicable to the parties’ allocation of liabilities, the Court will
dismiss Ashland’s unjust enrichment claim.

       Although the Court has already expressed skepticism on Ashland’s fraud claim based on
the sophistication of the parties and SPA’s negotiation history, that claim survives because
genuine issues of material fact exist as to whether the Heyman Parties made false representations
that Ashland justifiably relied upon.

13
   Samuel J. Heyman 1981 Continuing Tr. for Lazarus S. Heyman, 284 A.3d at 722.
14
   Id.
15
   Id.
16
   Id. at 722, 724.

                                                      3
       For the reasons set forth above, the Court GRANTS in part and DENIES in part the
Heyman Parties’ motion and DENIES Ashland’s motion. The Court asks the parties to prepare
an order to implement this decision. The parties shall also confer on a scheduling order to bring
the remaining issues to trial.

                                                     Respectfully,

                                                     /s/ Eric M. Davis
                                                     Eric M. Davis, Judge

EMD/li

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