Court Opinion

ID: 2825703
Source: CourtListenerOpinion
Date Created: 2015-08-11 06:17:49.829539+00
Date Added: 2024-06-11T11:28:44.395848
License: Public Domain

THE STATE OF SOUTH CAROLINA 

            In The Supreme Court 

Clint A. Chestnut, Rebatt Frankie Jefford, Mary Lou
Nance, Margaret Ramsey, Nicholas Ramsey, Harold
Cushman, Julia Edwards, Don Emery, Eula Cooke, and
Glenda Rabon Harper, Individually, and as Class
Representatives, Appellants,

v.

AVX Corporation, Respondent.

Appellate Case No. 2012-212143

             Appeal from Horry County 

      Benjamin H. Culbertson, Circuit Court Judge 

                  Opinion No. 27557 

     Heard January 23, 2014 – Filed August 5, 2015 

     AFFIRMED IN PART; REVERSED IN PART 

Gene McCain Connell, Jr., and Lawrence Sidney
Connor, IV, both of Kelaher Connell & Connor, PC,
of Surfside Beach, for Appellants.

Samuel W. Outten, of Womble Carlyle Sandridge
and Rice, LLP, of Greenville, Richard E. Morton,
Brad A. DeVore and Todd Billmire, all of Womble
Carlyle Sandridge and Rice, LLP, of Charlotte, North
Carolina, and Evan Slavitt, of Myrtle Beach, for
Respondent.
JUSTICE PLEICONES: This is an appeal from an order granting respondent's
Rule 12(b)(6), SCRCP, motion, and dismissing appellants' claims for trespass,
nuisance, negligence, and strict liability. Appellants contend on appeal that the
court erred in dismissing the nuisance, negligence, and strict liability claims.1 We
affirm the circuit court's dismissal of appellants' nuisance and strict liability causes
of action, but reverse the dismissal of the negligence claim.

                                         FACTS

Respondent manufactures electronic parts at a plant in North Myrtle Beach, South
Carolina. In 1980, respondent began using a chemical called trichloroethylene
(TCE)2 as a degreaser to clean machine tools and parts. At some point, TCE
escaped respondent's plant and migrated beyond the boundaries of respondent's
property, contaminating surrounding properties and groundwater.

In December 1996, respondent entered into a consent order with the South
Carolina Department of Health and Environmental Control (DHEC), in which
respondent admitted that it had violated certain state environmental statutes and
regulations. DHEC required respondent to implement a plan to clean up the TCE.
In 2007, environmental testing performed in a ten block section north of
respondent's plant showed levels of TCE greater than considered safe.

On November 27, 2007, a group of residents who own real property near
respondent's plant filed suit alleging causes of action for trespass, nuisance,
negligence, and strict liability. The residents brought the suit both individually and
as class representatives pursuant to Rule 23, SCRCP.

The complaint describes two subclasses within the general class definition.
Subclass A includes "all persons, partnerships, [or] corporations who own real
property in the area defined in paragraph 15 and whose property is contaminated
by chemicals which have escaped or have been spilled and left [respondent's] plant
property." Subclass B includes:

1
    They do not appeal the dismissal of their trespass claim.
2
 The Environmental Protection Agency has designated TCE as a volatile organic
compound. Because TCE is slightly heavier than water, it is difficult to extract if
spilled into the ground.
             all persons partnerships or corporations who own real property
             in the areas defined in paragraph 15 of the Complaint but are
             not contaminated; however these properties adjoin the
             contaminated area and are in such close proximity that the real
             property value has been affected or devalued by the chemical
             release at [respondent's] plant.

             (Emphasis supplied).

Appellants are Subclass B individuals.

The circuit court granted respondent's Rule 12(b)(6) motion and dismissed
appellants' claims with prejudice. In dismissing appellants' trespass, negligence,
and strict liability claims, the circuit court stated that such claims "cannot be
maintained when there is no evidence that alleged contamination has physically
impacted [appellants'] properties." Further, with respect to appellants' nuisance
claim, the circuit court noted that a claimant must plead an unreasonable
interference with the use and enjoyment of his or her property in order to state a
claim for nuisance. Therefore, the circuit court found that because their properties
are not contaminated, appellants' allegations did not state a claim for nuisance.
Appellants appealed.

                                       ISSUE

             Did the circuit court err in dismissing appellants' nuisance,
             negligence, and strict liability claims?

                                    ANALYSIS

On appeal from the grant of a Rule 12(b)(6) motion, we are concerned only with
whether the allegations of the complaint, which we must accept as true, state a
cause of action. E.g., Doe v. Bishop of Charleston, 407 S.C. 128, 754 S.E.2d 494
(2014). Further, novel questions of law should not ordinarily be resolved on a
Rule 12(b)(6) motion. E.g., Madison v. Am. Home Prod. Corp., 358 S.C. 449, 595
S.E.2d 493 (2004). Finally, this Court can affirm a lower court's order for any
reason appearing in the record. Rule 220(c), SCACR.
We affirm the circuit court's dismissal of both appellants' nuisance and strict
liability claims because the complaint alleges actual contamination of the property
in pleading both of these causes of action. Since each of these claims was pled
only on behalf of the Subclass A plaintiffs and not on behalf of appellants, we
uphold the circuit court's dismissal of these two causes of action pursuant to Rule
220(c), SCACR. As explained below, however, we find the complaint sufficiently
pleads a negligence cause of action on behalf of appellants, and therefore reverse
the dismissal of this claim.

In Babb v. Lee County Landfill S.C., LLC, 405 S.C. 129, 747 S.E.2d 468 (2013),
we held a plaintiff could maintain an environmental negligence suit based upon
offensive odors if the complaint alleged either "physical injury [to the plaintiff] or
property damage." Id. at 153, 747 S.E.2d at 481. Here, appellants have pled all
four elements of a negligence claim: duty, breach, proximate cause, and damages.
In alleging damages, appellants contend that their property is "worthless,"
"damaged," and "devalued" by the "harmful" and "dangerous" chemicals on the
real property that adjoins their properties. This pleading raises the novel question3
whether South Carolina will recognize "stigma damages." We reverse the circuit
court's dismissal under Rule 12(b)(6), SCRCP, because this case raises a novel
question of law. Madison v. Am. Home Prod. Corp., 358 S.C. at 451, 595 S.E.2d
at 494.

Further development of the facts may demonstrate that appellants' property has in
fact lost value due to its proximity to the property contaminated by TCE, or that
the contamination has been remediated and the alleged stigma ameliorated. The
creation of a factual record will allow us to decide whether to adopt a "no stigma
damages rule;" an "all stigma damages rule;" or a modified rule. See Diminished
Property Value Due to Environmental Contamination, 33 Am. Jur. 3d Proof of
Facts § 163 (1995 and Supp. 2014) (explaining the differing approaches to stigma
damages).

3
 Compare Gray v. Southern Facilities, Inc., 256 S.C. 558, 183 S.E.2d 438 (1971)
(holding that appellant failed to prove that the stigma damages to his real property
were attributable to the single act of the named defendant and therefore does not
decide whether we will allow recovery for this type of property damage).
                                  CONCLUSION

For the reasons given above, the circuit court's order is

AFFIRMED IN PART AND REVERSED IN PART.

BEATTY and HEARN, JJ., concur. TOAL, C.J., concurring in part and
dissenting in part in a separate opinion in which KITTREDGE, J., concurs.
CHIEF JUSTICE TOAL: I respectfully concur in part, and dissent in part.
While I concur in the majority's decision to affirm the circuit court's dismissal of
Appellants' claims for nuisance and strict liability, I would also affirm the
dismissal of Appellants' negligence claim.

           I. Negligence, Strict Liability, and Nuisance Claims

        Appellants appeal the circuit court's dismissal of their negligence, strict
liability, and nuisance claims. Despite the distinctions between these three causes
of action, when applied to cases involving environmental contamination, each is
defined by—and requires—a common element: actual damage or injury caused by
the source of contamination. See Babb v. Lee Cnty. Landfill SC, L.L.C., 405 S.C.
129, 145, 153, 747 S.E.2d 468, 476, 481 (2013) (stating that a negligence claim
"requires a plaintiff to establish physical injury or property damage," and that
"recovery under a nuisance claim requires proof of actual and substantial injury by
demonstrating that the defendant unreasonably interfered with his ownership or
possession of land"); Clark v. Greenville Cnty., 313 S.C. 205, 437 S.E.2d 117
(1993) (dismissing property owners' negligence and strict liability claims because
there was no evidence of damages caused by the contamination).

       As to Appellants' negligence and strict liability claims, I would affirm the
dismissal of both claims because Appellants did not allege facts indicating that
their properties are either actually damaged,4 or contaminated by TCE—a fact
which Appellants concede. See Babb, 405 S.C. at 145, 747 S.E.2d at 476. Further,
       I agree with the majority's decision to affirm the dismissal of Appellants'
nuisance claim, because Appellants failed to allege actual injury which interfered
with the ownership of their properties.5 See id. at 153, 747 S.E.2d at 481.

4
  The majority states that Appellants' negligence claim should survive because
Appellants assert claims that their properties are "worthless," unable to be sold, and
that their property has been "devalued" because of the nearby contamination. I
view these assertions as relative to Appellants' stigma damages argument and as
discussed, infra, South Carolina has not adopted stigma damages.
5
  Appellants assert they "have shown that by owning adjoining property to
contaminated property their enjoyment of their property has been affected."
However, Appellants do not identify how the contamination has interfered with the
use and enjoyment of their properties. Ravan v. Greenville Cnty., 315 S.C. 447,
464, 434 S.E.2d 296, 306 (Ct. App. 1993) ("[A] nuisance [cause of action requires]
a substantial and unreasonable interference with the plaintiff's use and enjoyment
       Into the equation, Appellants have introduced the concept of stigma damages
as a possible vehicle for their recovery. However, as discussed below, this Court
has not yet recognized stigma damages in South Carolina and I would decline to do
so here.

          II. Stigma Damages
       Despite the lack of contamination on Appellants' properties, they claim that
their properties are in such close proximity to the contaminated area that their
property values have been "affected or devalued." Based on this allegation, they
argue that this Court should recognize stigma damages. In the environmental
context, stigma damages are defined as:

      the negative perceptions associated with property that is
      contaminated, that was once contaminated or that lies in proximity to
      contaminated or previously contaminated property. Stigma represents
      a loss in value apart from the cost of curing the contamination itself,
      and it can be based upon actual or perceived risks or fear, such as
      "possible public liability," "fear of additional health hazards" and
      "simple fear of the unknown." Additionally, stigma is based upon
      perceptions about risks and liabilities associated with owning, or
      holding property interests in, contaminated property. The perceptions
      on which society bases the stigma need not be reasonable or
      substantiated.

E. Jean Johnson, Environmental Stigma Damages: Speculative Damages in
Environmental Tort Cases, 15 UCLA J. Envtl. L. & Pol'y 185, 185 (1997) (internal
footnotes omitted). Thus, stigma damages are not damages for actual physical
contamination, but for negative perceptions associated with the contamination. Id.

[of his property]."). Appellants do not allege, for instance, that the contamination
prevents them from using their properties in any particular way, affects their day-
to-day enjoyment of their properties, or interferes with their health. Instead,
Appellants merely contend that because their properties are located in close
proximity to the contamination, TCE has "affected" the enjoyment of their
property.
Some jurisdictions recognize stigma damages in limited circumstances;6 however,
this Court has not permitted the recovery of stigma damages.

       Gray v. Southern Facilities, Inc., 256 S.C. 558, 183 S.E.2d 438 (1971), is
the only South Carolina case that directly acknowledges stigma damages, albeit
generally. See 256 S.C. at 567–71, 183 S.E.2d at 442–44. In Gray, the appellant
alleged that a nearby fire caused his property to depreciate, even though the fire did
not physically damage the property. Id. at 568, 183 S.E.2d at 443. The basis of the
appellant's claim for damages was "predicated upon an asserted diminution in
market value resulting, not from any physical injury, but from a psychological
factor, in that prospective buyers allegedly would be reluctant to purchase the
property due to the fear of a similar occurrence in the future." Id. at 569, 183
S.E.2d at 443. This Court noted that "'injury to the reputation of . . . property has
been held not to be a proper element of damages,'" but acknowledged that no
general or firmly established rule had been developed at that point. Id. (quoting 22
Am. Jur. 2d Damages § 136).

        Ultimately, this Court held that the appellant in Gray could not recover
because his evidence as to the diminution of market value was speculative. Id. at
571, 183 S.E.2d at 444. Therefore, the Court found it unnecessary to decide
whether or not, or under what circumstances, stigma damages might be recovered.
Id. at 570, 183 S.E.2d at 443.

       Like the appellant in Gray, Appellants pled no physical damage to their
properties, but instead present speculative claims of a diminution in market value
and damages to the reputation of their properties that may be realized if Appellants
ever attempt to sell their properties. See id. at 571, 183 S.E.2d at 444. For
example, in their complaint, Appellants state that because of the nearby TCE
contamination, they are "unable to sell their homes/real property," "their property
has now become distressed property," and their property has been devalued.

      Due to the speculative nature of their claims, Appellants have provided no
reason for the Court to depart from the requirement of actual damage in claims
involving environmental contamination. Although the majority defers a discussion

6
 See, e.g., In re Paoli R.R. Yard PCB Litig., 113 F.3d 444, 463 (3d Cir. 1997);
Adams v. Star Enter., 51 F.3d 417, 424 (4th Cir. 1995) (applying Virginia law);
Mercer v. Rockwell Int'l Corp., 24 F. Supp. 2d 735, 744–45 (W.D. Ky. 1998);
Walker Drug Co. v. La Sol Oil Co., 972 P.2d 1238, 1246 (Utah 1998).
on whether to adopt the doctrine of stigma damages under further factual
developments, I would hereby decline Appellants' request to adopt stigma damages
in any form as an appropriate measure of damages in South Carolina.

         III. Conclusion
        In sum, my conclusion is rooted in the simple fact that Appellants' properties
have not been damaged by any contamination. The only injury Appellants allege
in their complaint is the possible devaluation of their properties, i.e., stigma
damages, which I would decline to recognize as a sufficient allegation of damages
in South Carolina for purposes of negligence, strict liability, or nuisance claims.
Therefore, I would affirm the circuit court's dismissal of Appellants' nuisance and
strict liability claims, as well as the dismissal of Appellants' negligence claim.

KITTREDGE, J., concurs.