A federal court in Michigan has held that a person who owns land adjacent to contaminated property, but whose property has not actually become contaminated, may not sue the neighboring owner for diminution of property value.
In 1988, defendant Emro Marketing Company (Emro) reported a release of gasoline from one of its gasoline stations. A site assessment revealed that contamination had spread beyond Emro's property boundary toward a nearby property in Harrison Township owned by plaintiff Carol Berardo (Berardo). Although the contamination had not actually reached Berardo's property, she claimed that her property had decreased in value as a result of the contamination. Her complaint alleged that the contamination constituted a trespass, a nuisance, and intentional infliction of emotional distress, among other claims.
The United States District Court for the Eastern District of Michigan granted Emro's motion for summary judgment and dismissed all of Berardo's claims. The court held that, in order for Berardo to recover under any of her theories of liability, she must "first prove that her property is contaminated." (Original emphasis.)
A claim of trespass, the court stated, requires an unauthorized and intentional intrusion upon the private premises of another. Because the contamination had not entered Berardo's property, the court held, no trespass existed.
Similarly, the court stated, Michigan law defines a private nuisance as "the intentional interference with the use and enjoyment of the land by those entitled to the use." Although nuisance "does not require a trespass," it "does require a showing of a 'substantial interference with [the plaintiff's] use and enjoyment of [her] property.'" The court found that Berardo had operated a successful saloon business on her property both before and after the contamination had occurred, and that her operation of the saloon had continued unimpaired by the contamination.
Berardo, however, attempted to show a "substantial interference" by alleging that the nearby contamination had caused a diminution in the value of her property. The court held that Michigan law does not recognize "nuisance claims based upon environmental contamination on adjacent or nearby property" where the plaintiff's "sole theory of nuisance [is] diminution in the value of their property." Because there was no substantial interference with the use of Berardo's property, the nuisance claim was dismissed.
Finally, the court dismissed Berardo's claim of intentional infliction of emotional distress. The court first noted that the Michigan Supreme Court "has never adopted the tort of intentional infliction of emotional distress into Michigan jurisprudence." Even if the tort was recognized in Michigan, the court held, it would not be found unless the conduct at issue was deliberate "extreme and outrageous conduct 'going beyond all bounds of decency' that would be viewed by an average member of the community as 'atrocious and utterly intolerable.'" In this case, the court found that the contamination arose out of a negligent act on property not even owned by the plaintiff, and there was no evidence that Emro caused the contamination "'intentionally or recklessly for the purpose of causing Plaintiff severe emotional distress.'"
Berardo v. Emro Marketing, No. 94-CV-74606-DT (E.D. Mich., Feb. 19, 1998).
This article was prepared by Kenneth C. Gold, a partner in our Environmental Department, and previously appeared in the April, 1998 edition of the Michigan Environmental Compliance Update, a monthly newsletter prepared by the Environmental Department and published by M. Lee Smith Publishers.