December 27, 2011
Category:
Arkansas Environmental, Energy, and Water Law
Arkansas Environmental, Energy, and Water Law
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Author:
Walter G. Wright
An entity known as JUST US FOUR, LLC ("Just Us") was conducting due diligence in conjunction with its possible purchase of a parcel of property approximately 29 acres in size in New Buffalo, Michigan. Just Us had been formed for the purpose of purchasing the property as an investment in anticipation of the approval and construction of a casino in the vicinity. The entity determined that an environmental assessment should be conducted of the property before it was purchased.
The Michigan Court of Appeals in
Just Us Four, LLC vs. Villa Environmental Consultants, Inc., 2011 Mich. App. LEXIS 2287 (Dec. 20, 2011) states that an environmental consultant, Villa Environmental Consultants, ("Villa") was contacted to conduct a Phase I Environmental Site Assessment of the property. In addition, the opinion states that Villa was asked to perform a "wetland review". It also notes that while the scope of the Phase I Environmental Site Assessment was described in writing, the scope of a "wetland review" was not defined either in writing or verbally. Villa ultimately completed the Phase I Environmental Site Assessment.
The opinion indicates that the eventual Environmental Assessment report advised that there was no evidence of recognized environmental conditions at the property with the exception of a sewage lagoon and a large mound located on the property. The report recommended that a Phase II investigation be conducted to determine whether the mound was contaminated. As to the potential for wetlands on the property, the opinion notes that the report advised in part, that "Blood Run Creek, intercepts the property, and that the wetland inventory map was reviewed on the Michigan Department of Environmental Quality's website and indicated potential wetlands near Blood Run Creek that flows through the site." The report also noted that a wetland by definition only has to be wet at the surface five to seven days during the growing season and that a wetland delineation should be completed if any filling of a water feature depression occurs.
The report provided no further information or conclusion regarding the potential for wetlands on the property.
The Just Us entity ultimately purchased the property and attempted to sell it. However, the prospective purchaser requested that Just Us obtain a wetland delineation and it was revealed that the property contains 15.2 acres of regulated wetlands. Just Us subsequently filed an action alleging that Villa, the environmental consultant, breached its contract by failing to properly conduct the contracted-for wetland review, and further that Villa was negligent in failing to properly utilize the available information to determine whether wetlands were present on the properly, and failing to effectively inform Plaintiff of the potential existence of wetlands on the property and assuring Plaintiff's representatives that there were no environmental conditions adversely effecting the property.
The remainder of the opinion addresses whether the trial court's granting Villa summary disposition of these claims was appropriate (including the court's finding that Plaintiff contracted for and received "a wetland review", etc.).
In other words, this opinion delves into a situation in which the parties clearly differed in their understanding of what constituted the scope of work for this particular environmental assessment. This is particularly problematic with wetlands since an ASTM phase does not include that issue.
A copy of the opinion can be downloaded below.
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