By Colin Connor, Plews Shadley Racher & Braun LLP
Recently in Elkhart Foundry & Machine Co., Inc., v. City of Elkhart Redevelopment Commission for the City of Elkhart, No. 20A03-1709-CT-2136, (Ind. Ct. App. Oct. 3, 2018), the Court of Appeals of Indiana issued a unanimous decision regarding the statute of limitations governing an environmental legal action (ELA). The case involved the City of Elkhart’s (Elkhart) remediation of a site once owned and operated by the Elkhart Foundry & Machine Co. (the Foundry). The Foundry had operated at the site from the early 1900s until it went out of business in 2004. In 2007, Elkhart became interested in purchasing the site and learned it was contaminated. In 2010, Elkhart bought the property and began remediating it. In 2016, Elkhart filed a cost recovery action against the Foundry. Elkhart’s suit included (1) an ELA claim; (2) a “mini-CERCLA” claim; and (3) a nuisance claim. The Foundry moved for summary judgment on all claims. The trial court granted summary judgment to the Foundry on Elkhart’s “mini-CERCLA” and nuisance claims but denied it as to the ELA. Both parties appealed the trial court’s ruling.
The bulk of the Court of Appeals’ decision concerned determining the correct statute of limitations for an ELA. Indiana Code Section 34-11-2-11.5 states an ELA can be used to seek “[t]he costs incurred not more than ten (10) years before the date the action is brought, even if the person or any other person also incurred costs more than ten (10) years before the date the action is brought.” Elkhart argued that this language is a statute of limitations meaning that a plaintiff must file an ELA within 10 years of incurring applicable costs. The Foundry, however, argued that this language was just a damages cap and the six-year real property damage statute of limitations barred Elkhart’s claim because it was brought in 2016 regarding contamination it knew existed in 2007.
In reaching its decision, the Court of Appeals analyzed the history of the ELA statute of limitations. In 2009, the Supreme Court of Indiana in Cooper Indus., LLC v. City of South Bend, 899 N.E.2d 1274, 1286 (Ind. 2009) adopted the six-year statute of limitations for an ELA claim but stated there was no need to decide the issue definitively because neither statute of limitations would bar the plaintiff’s claims. Elkhart Foundry at *5. In 2011, the Indiana legislature drafted the 10-year ELA language quoted above that is the subject of this dispute. Id. at *6. The Elkhart Foundry court held that while the statute “does not include the typical ‘statue of limitations’ language stating when an action ‘must be brought’ . . . or ‘must be commenced’ . . . it has the same effect.” Id. at 7–8. In reaching this decision, the Court of Appeals looked to the provision’s placement in Article 34-11 of the Indiana Code. The legislature gave Article 34-11 the heading “Limitation of Actions” and gave Chapter 34-11-2 the heading “Specific Statutes of Limitation.” The Court of Appeals held that “the fact that Section 34-11-2-11.5 was placed in Chapter 34-11-2, alongside numerous statutes of limitation, tells us that the legislature intended Section 34-11-2-11.5 to be read as a statute of limitation.” Id. at *8. For these reasons and others, the Court of Appeals held that a 10-year statute of limitations governs ELA claims and affirmed the trial court on all counts.
Read the full opinion here.
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