Court Opinion

ID: 1019357
Source: CourtListenerOpinion
Date Created: 2013-07-04 22:34:26.496631+00
Date Added: 2024-06-11T15:14:12.312053
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 05-1598

VERNON PROCTOR; ANNIE PROCTOR; WALLACE P.
MILLS, SR.; BETTY JO MILLS; DEVONA SNYDER;
GLENDA PIERCE; NANCY ROPER; STEVEN W. JENKINS,

                                           Plaintiffs - Appellants,

           versus

7-ELEVEN, Incorporated, a Texas Corporation;
RUBY C. GAITHER,

                                            Defendants - Appellees.

Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg. W. Craig Broadwater,
District Judge. (CA-02-21-3)

Argued:   March 15, 2006                      Decided:   May 18, 2006

Before WIDENER and WILLIAMS, Circuit Judges, and William L. OSTEEN,
United States District Judge for the Middle District of North
Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Paul Gregory Taylor, Martinsburg, West Virginia, for
Appellants. Charles F. Printz, Jr., BOWLES, RICE, MCDAVID, GRAFF
& LOVE, P.L.L.C., Martinsburg, West Virginia, for Appellees. ON
BRIEF: Brian M. Peterson, BOWLES, RICE, MCDAVID, GRAFF & LOVE,
P.L.L.C., Martinsburg, West Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

                              2
PER CURIAM:

        This diversity action arises out of a gasoline leak from an

underground storage tank at a 7-Eleven, Inc. gas station in early

2001.    The Appellants, Vernon and Annie Proctor, Wallace and Betty

Jo Mills, Devona Snyder, Glenda Pierce, Nancy Roper, and Steven W.

Jenkins (collectively the “property owners”), residential property

owners neighboring the 7-Eleven, filed suit in West Virginia state

court against 7-Eleven and a store manager at the 7-Eleven alleging

claims for negligence, strict liability in tort, trespass and

nuisance, and punitive damages caused by the leaking of gasoline

onto their property.      After 7-Eleven removed the case to federal

court, the property owners moved to remand the case and to amend

their    complaint.      The   district    court    denied      both   motions,

ultimately granting summary judgment to 7-Eleven on all of the

property owners’ claims for relief.        The Appellants now appeal the

grant    of   summary   judgment    and   the    district      court’s   orders

precipitating    the    summary    judgment     order.   For    the    following

reasons, we affirm, finding no error in the district court’s

orders.

                                     I.

         In February 2002, the property owners filed suit in West

Virginia state court against 7-Eleven and a local store manager

that they believed was responsible for the leak. The named manager

                                      3
was a West Virginia resident, 7-Eleven is a Texas corporation, and

all of the property owners are West Virginia residents.         The

property owners alleged that 7-Eleven and the manager had been

negligent in storing and dispensing the gasoline, that 7-Eleven and

the manager were strictly liable for the damage inflicted by the

ultra-hazardous gasoline, and that the infiltration of gasoline

onto their property constituted a nuisance or trespass.         The

property owners sought monetary damages for the fair market value

of their real estate, punitive damages, annoyance and inconvenience

damages, damages for emotional distress, out-of-pocket losses,

medical expenses, and mental anguish.

     On March 28, 2002, 7-Eleven removed the case to federal court

alleging that diversity jurisdiction existed because the property

owners could not establish a cause of action against the non-

diverse manager because she was not the manager of the 7-Eleven at

the time the leak occurred.     The district court dismissed the

former manager from the suit.   The property owners moved to remand

the case and sought to amend their complaint to add the correct

manager.   By the time that the property owners discovered the name

of the responsible manager, however, the district court concluded

that the statute of limitations had run against that manager.   The

district court therefore denied the property owners’ motion to (1)

remand the case and (2) to amend their complaint, and the property

owners did not seek interlocutory review of this order.

                                 4
     During the discovery period, the property owners filed an

action before the Jefferson County (West Virginia) Commission Board

of Review and Equalization (the Board) seeking a reduction in the

value of their properties and corresponding taxes. The Board found

that each of the properties had suffered a 75% decrease in value

from the contamination.            This finding, however, was temporary and

the Board instructed the property owners that they must request the

reduction     each     year    until     their    properties         had     been    fully

remediated.

     Upon     learning        of   the     Board’s    75%        reduction    in      value

determination,       7-Eleven      filed    a   motion      in    limine     to     exclude

evidence    of   the    Board’s      findings,       arguing       that    the      Board’s

determination as to “diminished value” was irrelevant and highly

prejudicial.     The district court agreed and granted the motion to

exclude.

     Also during the discovery process, Mr. Mills, one of the

property    owners,     died.        The    property     owners       then     moved    to

substitute the administrator of Mr. Mills’s estate as a party. The

district court denied the motion to substitute, reasoning that

substitution was unnecessary as Mr. Mills held his property in a

co-tenancy with his wife, who survived him and was already a

plaintiff in the suit.

     Ultimately, 7-Eleven moved for summary judgment on all claims

and the district court granted the motion.                       The property owners

                                            5
filed this appeal and we have jurisdiction over this diversity suit

pursuant to 28 U.S.C.A. § 1332 (West Supp. 2005) and 28 U.S.C.A. §

1291 (West 1993). The property owners seek review of the following

lower court decisions:       the denial of the motion to remand, the

denial of the motion to amend their complaint, the grant of summary

judgment on all of their claims, the exclusion of the Board’s 75%

reduction in value determination, and the denial of the motion to

substitute.    We will address each of their contentions in turn.

                                      II.

     We begin with the property owners’ argument that the district

court erred in denying their motion to amend the complaint and

their motion to remand the case to West Virginia state court.          The

local manager the property owners sought to add was a West Virginia

resident,     and   the   amendment   would   have   destroyed   diversity

jurisdiction in the case.        See 28 U.S.C.A. § 1332.         Thus, the

motion to remand is inextricably tied to the motion to amend.

Without the amendment of the complaint, diversity jurisdiction

existed, and a remand would have been erroneous.             Because the

motions are linked together, we can dispose of them jointly.

     It is well-established in this circuit that

     [w]here a matter has proceeded to judgment on the merits
     and principles of federal jurisdiction and fairness to
     parties remain uncompromised, to disturb the judgment on
     the basis of a defect in the initial removal would be a
     waste of judicial resources. Although the interest in
     judicial economy is most pressing where an action has

                                       6
      proceeded to trial, we feel that the same considerations
      are applicable to summary judgment.

Aqualon Co. v. MAC Equip., Inc., 149 F.3d 262, 265 (4th Cir.

1998)(internal quotation marks omitted).                      Thus, “even if remand

would    have    been    proper,         once   an    improperly    removed    case    has

proceeded to final judgment in federal court that judgment should

not be disturbed so long as the federal court had jurisdiction over

the claim at the time it rendered its decision.”                      Id. at 264; see

also Caterpillar Inc. v. Lewis, 519 U.S. 61, 77 (1996) (“To wipe

out the adjudication postjudgment, and return to state court a case

now   satisfying        all   federal       jurisdictional       requirements,       would

impose    an    exorbitant         cost    on   our    dual   court   system,    a    cost

incompatible with the fair and unprotracted administration of

justice.”).

      Because     there       is    no    dispute     that    diversity     jurisdiction

existed at the time the district court granted summary judgment to

7-Eleven, we do not further address the motion to remand. The

property       owners    have      failed       to    demonstrate     any    exceptional

circumstances that require us to review the merits of that motion.

Aqualon, 149 F.3d at 265 (declining to review merits of remand when

case proceeded to final judgment in federal court and the party

requesting remand “has not argued that it was prejudiced in some

way by the federal forum”).                 And because we will not vacate the

judgment based on any error that occurred in the motion to remand,

we need not address the merits of the motion to amend.

                                                7
                                  III.

     We now turn to the property owners’ argument that the district

court erred in granting summary judgment to 7-Eleven.              We review

the grant of summary judgment de novo, “viewing the disputed facts

in the light most favorable to” the nonmoving party.          Toll Bros.,

Inc. v. Dryvit Sys., Inc., 432 F.3d 564, 568 (4th Cir. 2005).

“Summary    judgment   is   warranted   when    the   admissible    evidence

forecasted by the parties demonstrates that no genuine issue of

material fact exists and that the moving party is entitled to

judgment as a matter of law.”           Id.    (internal quotation marks

omitted).

     The property owners brought the following three classes of

claims against 7-Eleven:       real property claims, personal injury

claims, and a punitive damages claim.         We will address the grant of

summary judgment on each set of claims.

                       a.   Real Property Claims

     Turning first to the property owners’ claims for damage to

their real properties, we look to West Virginia law on real

property damage to assess the claims.           Jarrett v. Harper & Son,

Inc., 235 S.E.2d 362 (W. Va. 1977), is the seminal West Virginia

case on property damage.      Jarrett sets forth the following rule:

     When realty is injured the owner may recover the cost of
     repairing it plus his expenses stemming from the injury
     including loss of use during the repair period. If the
     injury cannot be repaired or the cost of repair would
     exceed the property’s market value, then the owner may
     recover the money equivalent of its lost value plus his

                                    8
       expenses resulting from the injury including loss of use
       during the time he has been deprived of his property.

Id. at 365.     When 7-Eleven received notice of the leak and its

contamination,       it    identified    the    leaking     tank    and   began     the

remediation process as required by federal law and West Virginia

law.     See 40 C.F.R. § 280.53 (2005); W. Va. Code Ann. § 22-17-14

(LexisNexis 2002). The remediation process was ongoing at the time

7-Eleven moved for summary judgment, and 7-Eleven and its insurer

were paying the full costs of cleaning the properties.                    Because 7-

Eleven has paid the full costs of remediation for the properties,

the property owners seek damages in the form of diminution in

value.

       In a typical case, a plaintiff may recover the diminution in

value only where the property cannot be repaired or the cost of

repair exceeds the market value of the property.                      The property

owners in this case cannot recover for diminution in value because

the    restoration     process    is    ongoing     and   the      property    owners

recognize that their properties will be restored pursuant to state

and federal law.          Because the law requires that 7-Eleven restore

the properties and the process remains ongoing, if we allowed the

property    owners    to    recover     for    diminution    in    value,     at   this

juncture, they may ultimately receive double recovery for the same

loss by having their properties restored and receiving diminution

in value damages.          Such double recovery is not contemplated by

                                          9
Jarrett, which sets forth an “either or” option for repair damages

or loss of value damages.      Thus, the property owners may not

receive damages for any temporary diminution in value of their

properties and the grant of summary judgment on the real property

damages was appropriate.

                    b.   Personal Injury Claims

     The property owners next argue that the district court erred

in granting summary judgment on their claims for annoyance and

inconvenience, mental anguish, and emotional distress.      Seven-

Eleven contends that the district court properly granted summary

judgment on these grounds because the property owners failed to

present evidence sufficient to support these claims.

     Pursuant to Federal Rule of Civil Procedure 56, “[w]hen a

motion for summary judgment is made and supported as provided in

this rule, an adverse party may not rest upon the mere allegations

or denials of the adverse party’s pleadings, but the adverse

party’s response, by affidavits or as otherwise provided . . .,

must set forth specific facts showing that there is a genuine issue

for trial.”    At this stage of the proceedings, we, like the

district court, have the benefit of the property owners’ responses

to 7-Eleven’s interrogatories and the deposition testimony of the

property owners.

     Although the property owners’ complaint included a request for

personal injury damages, the property owners’ answers to 7-Eleven’s

                                 10
interrogatories made no mention of these damages.     For example, 7-

Eleven asked each of the property owners to provide “an itemized

account of those losses [stated in the   complaint], including, but

not limited to, the following:    (a) any lost wages and income; (b)

any medical treatments, examinations and tests; and (c) any other

out-of-pocket expenses.”     (J.A. at 566.)    Each of the property

owners responded to this inquiry with the following statement:

“The losses relate to damages to the value of Plaintiffs’ real

estate because of gasoline contamination.     These losses have not

yet been calculated.       When such a calculation is made, this

response will be supplemented.”   (J.A. at 566.)    At the time of the

district court’s summary judgment order, no response had been

supplemented.   The interrogatories also asked the property owners

to “state with specificity the nature of the damages you claim to

have suffered to your property and to your person.”      (J.A. at 566

(emphasis added).)     Each of the property owners responded by

referring to his answer to the first question.     None of the answers

to the interrogatories discussed any personal injury damages, such

as annoyance or inconvenience, nor did any answer mention out-of-

pocket expenses.   The only damages mentioned were to “the value of

Plaintiffs’ real estate.”    (J.A. at 566.)

     The deposition testimony also provides no support for the

property owners’ personal injury claims.      For example, Mr. Mills

stated that he had not suffered any out-of-pocket losses, the loss

                                  11
of   use   of   his   home,   or   medical   expenses.   And   when   asked

specifically what kind of damages he had suffered, Mr. Mills stated

only the lost value of his home.           Likewise, when defense counsel

asked Ms. Snyder what damages outside of the diminution in value of

her property she had sustained, Ms. Snyder responded that she was

not aware of any other damages.         Ms. Pierce also indicated in her

deposition that she had not incurred any expenses other than the

loss of value of her property.       Mr. and Mrs. Proctor indicated that

on two occasions they left the house for two or three hours due to

perceived gas fumes in their home. Mr. Proctor further stated that

he had not lost any wages or income, nor had he incurred any out-

of-pocket losses or medical expenses, but that he was “stress[ed]”

about having gasoline under his home because he was concerned that

the fumes in his home could ignite.           Mr. Proctor also admitted,

however, that the fumes in his home had not registered at dangerous

levels and that he never contacted emergency services when the

fumes were present.      Mrs. Proctor testified that she had to leave

her house on a couple of occasions for an hour when she smelled

fumes.     Mrs. Proctor also stated that personnel performing the

remediation processes installed a blower near their home, which

successfully drew the fumes out of the house in less than an hour.

Finally, Mr. Jenkins testified that the loss he suffered from the

gasoline leak was the decrease in value of his home.           Mr. Jenkins

also testified that he feared the gasoline fumes would give him

                                      12
cancer, so he moved his office out of the contaminated property and

into his home.    Mr. Jenkins further stated that he is not seeking

any lost profits from the relocation of his office and no out-of-

pocket expenses, such as moving costs or new furniture.         Mr.

Jenkins has not undergone any testing to determine whether he has

actually been exposed to Benzene, the carcinogenic agent found in

gasoline.   Mr. Jenkins also stated that he has rented the property

since the gasoline spill.

     In summary, only Mr. Jenkins and the Proctors have actually

indicated that the gasoline leak changed any part of the routines

of their lives.   The Proctors’ claims for leaving their house on a

couple of occasions for approximately one hour are minimal at best.

Mr. Jenkins’s claim for the loss of use of his office relates not

to the gasoline fumes, but to his unfounded fear of cancer.

Despite Mr. Jenkins’s alleged fear of cancer, he has not undergone

any medical testing, nor did he contact emergency personnel to

determine whether any hazardous fumes were actually in his house.

Notably, unlike the Proctors, Mr. Jenkins never stated that he

smelled fumes in his home.   Because Mr. Jenkins has only provided

us with his personal belief that he would develop cancer if he

continued to work in the affected property, his claim for loss of

use is, at most, speculative and without a basis in fact.       Mr.

Jenkins gives no explanation why he cannot work on his property

when renters occupying his property and his neighbors have had no

                                 13
trouble    remaining     in   their   homes    throughout    the   remediation

process.    The de minimus nature of the Proctors’ loss of use, the

unsubstantiated basis for Mr. Jenkins’s loss of use, and the

failure of the other property owners to allege any form of loss of

use require us to affirm the district court’s grant of summary

judgment on the claims for personal injury damages.

                         c.   Punitive Damages Claim

      We now turn to the district court’s grant of summary judgment

on the punitive damages claim. The property owners contend that 7-

Eleven recklessly and intentionally leaked gasoline onto their

properties.      See   Alkire v. First Nat’l Bank of Parsons, 475 S.E.2d

122, 129 (W. Va. 1996) (holding that a plaintiff is entitled to a

punitive damage award “in actions of tort, where gross fraud,

malice, oppression, or wanton, willful, or reckless conduct or

criminal indifference to civil obligations affecting the rights of

others appear”).       Under West Virginia law, the property owners may

not recover punitive damages unless they also recover compensatory

damages. Garnes v. Fleming Landfill, Inc., 413 S.E.2d 897, 908 (W.

Va. 1991).       Thus, because the property owners have failed to

demonstrate any compensable injury, no punitive damages may be

awarded under West Virginia law.            Moreover, 7-Eleven’s conduct in

reporting and remedying the leak hardly constitutes reckless or

intentional conduct. Seven-Eleven has stated that a discrepancy in

the   gasoline    storage     tanks   was   first   found   in   January   2000,

                                       14
confirmed in February 2000, and reported to the state of West

Virginia on February 24, 2000.             This prompt investigation and

notification to West Virginia coupled with 7-Eleven’s compliance

with the mandated clean-up procedures reflect 7-Eleven’s respect

for the law and its neighbors.        We therefore affirm the district

court’s grant of summary judgment to 7-Eleven on the punitive

damages claim.

                                     IV.

        Next, the property owners contend that the district court

erred    in   excluding   from   evidence   the    West   Virginia   Board   of

Equalization and Review’s valuation of the affected properties. We

review “the decision of a district court to admit or exclude

evidence for abuse of discretion.” Westberry v. Gislaved Gummi AB,

178 F.3d 257, 261 (4th Cir. 1999).                As discussed above, West

Virginia law does not allow for the recovery of diminution in value

in this case, and therefore any evidence of diminution in value

would be necessarily irrelevant.       The district court did not abuse

its discretion in excluding from evidence the Board’s assessment.

                                     V.

     Finally, we address whether the district court properly denied

the motion to substitute.         We review the denial of a motion to

substitute a party under Rule 25 of the Federal Rules of Civil

                                     15
Procedure for abuse of discretion.         E.I. Dupont De Nemours & Co. v.

Lyles & Lang Constr. Co., 219 F.2d 328, 332 (4th Cir. 1955).                 In

light of our affirmance of the summary judgment order, however, we

hold that any error in the denial of the motion to substitute

would be harmless.*        See Fed. R. Civ. P. 61 (“The court at every

stage of the proceeding must disregard any error or defect in the

proceeding which does not affect the substantial rights of the

parties.”).

                                     VI.

     In summary, we find no error in the district court’s orders

denying the property owners’ motions to remand and to amend their

complaint, granting summary judgment to 7-Eleven on all claims,

granting   the    motion   to   exclude    the   Board’s   valuation   of   the

afflicted properties, and denying the property owners’ motion to

substitute.      The district court is therefore

                                                                   AFFIRMED.

     *
      The district court denied the property owners’ motion to
substitute the administrator of Mr. Mills’s estate because Mr.
Mills held his property in a co-tenancy with his surviving wife who
was already a plaintiff in the suit.      We note that under West
Virginia law, the death of one co-tenant does not terminate a suit
where the action is for the recovery of damages to jointly owned
property. Rowe v. Shenandoah Pulp Co., 26 S.E. 320, 322 (W. Va.
1896).

                                     16