The Georgia Court of Appeals, in the case of Hammond v. City of Warner Robins, recently issued an environmental liability opinion that needs to be considered seriously by all purchasers, sellers, owners and managers of, as well as lenders to, real estate in Georgia. This decision creates significant exposure to third party damage claims based on:
- the migration of extremely minor, non-harmful amounts of contamination from a defendant's property to a claimant's property, or
- the mere proximity of the claimant's property to a defendant's contaminated property.
Hammond v. City of Warner Robins
In the Hammond case, a homeowner whose property was 175 feet from a closed sanitary landfill owned by the City of Warner Robins sued the City under nuisance and inverse condemnation theories. The claims resulted from the finding of less than 100 parts-per-million (ppm) of methane gas at a depth of 20 feet below the surface of the homeowner's property. The undisputed evidence established that methane is odorless and colorless and that only when concentrations reach or exceed 50,000 ppm does it present any type of health, environmental or safety hazard. Thus, the concentration detected on the plaintiff's property was less than 1/500 of the concentration necessary to render it potentially harmful.
The plaintiff nonetheless sued and, based on an appraiser's opinion, claimed that the value of her property had been reduced 40 percent based upon the "stigma" supposedly caused to the property by this minor amount of contamination. In light of the undisputed evidence that the low concentration of methane did not present a risk of harm, the trial court granted summary judgment for the City.
In a lengthy, complex decision, the Georgia Court of Appeals reversed the lower court's decision and held that a jury must decide the issue of whether or not a nuisance or inverse condemnation existed under the circumstances and the amount of damages available. The appellate decision discussed many damages that the jury might award under the circumstances, including diminution of fair market value, lost rental value, and damages for annoyance and discomfort.
Although the Court held that a physical "invasion" of the plaintiff's property had occurred as a result of the minor methane levels found, it also noted that a showing of physical invasion is unnecessary if the condition of the defendant's property somehow interferes with the right to possess, use, enjoy or dispose of the plaintiff's property. Thus, it appears that the Court also opened the door for diminution of value and other claims based upon the mere proximity of a contaminated site to a plaintiff's property.
Under the Hammond decision, it appears that for such claims to reach a jury, all a plaintiff would need is the opinion of one appraiser concluding that some diminution in property value has occurred as a result of minor, nonhazardous amounts of migrated or nearby contamination or evidence that the plaintiff's enjoyment of the property was somehow disturbed by such contamination. The absence of environmental, health or safety risk or harm is not enough to defeat tort claims on summary judgment.
Decisions Create Risk of Liability for Minimal Contamination
In an earlier case, the Georgia Court of Appeals had held that nuisance liability, including liability for punitive damages, could be placed upon an owner of contaminated property that failed to clean up preexisting contamination that had migrated onto the plaintiff's property. These decisions, taken together, appear to create a risk of liability (including punitive damages) for owners of property with even minor contamination that they "allow" to pass through or remain unabated on their property.
While these types of claims are not unprecedented, the Hammond case is the first time a Georgia appellate court has expressly allowed them in the face of undisputed minor, non-harmful contaminant levels. The City of Warner Robins is seeking discretionary appellate review of this decision by the Georgia Supreme Court.
Please let us know if you have any questions or any interest in participating in the presentation of a "friend of the court brief" on this subject. If the Supreme Court does not grant review of and reversal of this opinion, then we advise that you consider your risks and options with respect to even minimally contaminated property in Georgia with extreme care.