Maryland Department of the Environment v. Underwood

HARRELL, Judge. On 5 February 1998, the Maryland Department of the Environment (“the MDE”), Petitioner, filed suit in the Circuit Court for Charles County against George Underwood and ¹⁶³ Carl Breeden, Respondents, seeking reimbursement for expenditures the MDE incurred in removing scrap tires 1 from Respondents’ property. The Circuit Court, on 15 December 1999, granted Petitioner’s motion for partial summary judgment on the issue of liability, holding that, under Maryland Code (1996 Repl.Vol., 2001 Supp.), Environment Article, § 9-276, Respondents were strictly liable as the property owners of the land at the point in time the MDE took its remedial action. Following a trial on a determination of those expenditures, the Circuit Court assessed damages against Respondents in the amount of $ 1,015,299.72, plus court costs.

On 18 February 2000, Respondents filed an appeal to the Court of Special Appeals. In an unreported opinion, the Court of Special Appeals vacated the judgment of the Circuit Court and remanded the case for further proceedings. According to the Court of Special Appeals, Respondents were entitled to assert equitable defenses at trial and, therefore, the Circuit Court erred in granting summary judgment on liability in favor of Petitioner. We granted Petitioner’s petition for writ of certiorari and Respondents’ conditional cross-petition, Maryland Dep’t of the Env’t v. Underwood, et al., 364 Md. 534 , 774 A.2d 408 (2001), to consider the following questions: 1.

Whether Maryland Code (1996 Repl.Vol., 2001 Supp.), Environment Article, § 9-276 imposes strict liability on a property owner for costs incurred by the Maryland Department of the Environment in removing illegally stored or disposed of scrap tires on that person’s property. 2 ¹⁶⁴ 2. Whether the Court of Special Appeals erred in concluding a property owner is entitled to assert equitable defenses on his or her behalf under Maryland Code (1996 RepLVol., 2001 Supp.), Environment Article, § 9-276. I. A. Factual Background On 24 October 1994, Respondents, George Underwood and Carl Breeden, purchased for $6,000 from Ms. Janet Morgan 3 the right to redeem approximately 17 acres of land located in Hughesville, Maryland. On 23 May 1995, after foreclosing the equity of redemption, Respondents acquired the property by deed from Charles County, Maryland.

Prior to and at the time of their purchase of the property, Respondents were aware that a scrap tire pile, containing an estimated 720,000 ¹⁶⁵ tires, was located on the land. 4 Respondents, however, had no direct contact with Petitioner, the MDE, regarding the scrap tire pile prior to or at the time of their purchase. 5 Following the purchase, Petitioner sent a letter to Respondents, dated 4 August 1995, informing them that it had “been conducting an ongoing investigation in regards to the storage of scrap tires at the Site,” and that, as a “current property owner,” Respondents were “responsible for the removal of improperly stored scrap tires at th[e] Site.” 6 The letter requested Respondents “contact the Department to set up a meeting to discuss [their] options for the removal of the scrap tires. ...” It also indicated that Petitioner had “the authority ¹⁶⁶ to conduct the cleanup” if Respondents did not “intend to proceed with a removal action in the very near future,” and informed Respondents that they would remain liable for all costs associated with that cleanup. On 15 August 1995, representatives of Petitioner met with Respondents to determine if Respondents would grant Petitioner access to the property to remove the scrap tires. At that time, Respondents refused to grant Petitioner access because they wanted “to confer with [their] attorney about it.” On 29 September 1995, after receiving no communication from Respondents, Petitioner sent a letter to Respondents informing them that it was filing a complaint “to obtain access to the Site.” The letter also provided that the complaint could “be resolved by [Respondents] granting the Department access to conduct the necessary removal or remedial action.” Upon receipt of that letter, Respondents, on 2 October 1995, granted Petitioner access to the property “for the purpose of taking any and all actions necessary for the removal of [the] scrap tires that [we]re stored there,” but did not “admit liability for the expenses associated with” that removal. After receiving access to the property, Petitioner contracted with the Maryland Environmental Service (“the MES”) to remove the scrap tires.

The MES and its subcontractors completed the scrap tire removal and remediation of the land on or about 10 September 1996. On 21 November 1997, Petitioner sent a letter to Respondents informing them that “[p]ursuant to § 9-276 of the Environment Article” they were “required to reimburse the Department for all costs associated with the removal” of the tires. 7 The letter requested Respon ¹⁶⁷ dents contact Petitioner within fifteen days “to discuss [their] reimbursement plans” for the $1,004,453 expended in the scrap tire cleanup. Respondents refused this request and took no action to reimburse Petitioner for the cleanup costs. B. Procedural History On 5 February 1998, Petitioner filed a complaint against Respondents in the Circuit Court for Charles County “seeking recovery of money expended to cleanup and remediate” the scrap tire pile located on Respondents’ property.

The complaint alleged that “[a]s [Respondents] are the owners of the Site in question, they are liable,” under § 9-276, “for all expenditures including legal fees and costs from the State Used Tire Cleanup and Recycling Fund for the storage, removal and restoration or remedial action of the scrap tires from the Site.” In their answers to Petitioner’s complaint, filed on 1 June 1998 and 23 December 1998, both Respondents denied the claims asserted by Petitioner and demanded a trial by jury. Petitioner, in response to those answers, filed a motion to strike demand for jury trial, maintaining “[t]he relief sought ... is reimbursement, which is equitable in nature and does not give rise to a jury trial.” The Circuit Court struck the jury prayer. In addition, Respondents, on 20 April 1999, filed a motion for summary judgment arguing they were entitled to judgment as a matter of law because they “did not cause the tires to be stored” on the property. Petitioner also filed a motion for partial summary judgment maintaining that Respondents, as “the owners of the site, [we]re liable to [Petitioner] for the costs incurred in the clean up of the scrap tires” under § 9-276.

Therefore, Petitioner argued, it should be “awarded Summary Judgment on the issue of liability as a matter of law.” On 15 December 1999, the Circuit Court denied Respondents’ motion and granted Petitioner’s motion. In its Opinion ¹⁶⁸ and Order regarding these rulings, the Circuit Court considered the language and legislative history of § 9-276 and held the statute imposed strict liability on Respondents. In so doing, the Circuit Court rejected Respondents’ interpretation of the statute making “responsibility or fault ... an element of the reimbursement requirement.” It read the language of § 9-276, which provides that reimbursement be made to the MDE “by the owner or operator of the site or any other person who caused the tires to be stored or disposed of at the site ...,” as placing liability on an owner or operator regardless of culpability.. According to the Circuit Court, “the phrase ‘any other person who caused the tires to be stored or disposed of at the site’ should be read as a stand alone clause, thereby creating an additional category of liable persons distinct from the owner or operator of the site.” Subsequently, a trial on a determination of costs was held.

Respondents again argued that their case was one “at law,” rather than “at equity,” and that they were entitled to a trial by jury. Alternatively, Respondents maintained that, if their case was “at equity,” they were entitled to raise equitable defenses. 8 The Circuit Court, however, did not agree with Respondents. It denied Respondents’ motion to reconsider the striking of the jury prayer and agreed with Petitioner that the equitable defense of laches could not be raised against the State. 9 Thereafter, on 1 February 2000, the Circuit Court ¹⁶⁹ found Petitioner’s costs were “fair and reasonable” and assessed damages against Respondents in the amount of $1,015,299.72, plus court costs. On appeal to the Court of Special Appeals, Respondents argued the Circuit Court erred in granting partial summary judgment in favor of Petitioner because, by “[ujtilizing the rules of statutory construction to ascertain legislative intent,” it is “clear that § 9-276 was not enacted so as to impose strict liability.” In an unreported opinion, the Court of Special Appeals explained that the Circuit Court “imposed strict liability without fault, based on its conclusion that the language in § 9-276 is ‘essentially similar to the federal statutory language of CERCLA.’ ” 10 See generally 42 U.S.C. § 9607 (1994 & Supp.1999) (“CERCLA § 9607”).

According to the Court of Special Appeals, however, tires “do not constitute ¹⁷⁰ hazardous materials or hazardous substances as defined in either federal law [ (CERCLA) ] or Title 7 of the Environment Article.” Therefore, the intermediate appellate court held the Circuit Court erred in prohibiting Respondents from asserting equitable defenses and in granting Petitioner’s motion for partial summary judgment. Because Respondents “were entitled to assert whatever equitable defenses [as may be] applicable,” the Court of Special Appeals vacated the judgment of the Circuit Court and remanded the case for further proceedings. 11 ¹⁷¹ II. A. In reviewing a grant of a summary judgment motion, we are “most often concerned with whether a dispute of material fact exists.” Lippert v. Jung, 366 Md. 221, 227 , 783 A.2d 206, 209 (2001). See also Grimes v. Kennedy Krieger Inst., Inc., 366 Md. 29, 71 , 782 A.2d 807, 833 (2001); Pence v. Norwest Bank, Minn., N.A., 363 Md. 267, 278 , 768 A.2d 639, 645 (2001); Matthews v. Howell, 359 Md. 152, 161 , 753 A.2d 69, 73 (2000); County Comm’rs of Caroline County v. J. Roland Dashiell & Sons, Inc., 358 Md. 83, 92 , 747 A.2d 600, 605 (2000); Hartford Ins.

Co. v. Manor Inn of Bethesda, Inc., 335 Md. 135, 144 , 642 A.2d 219, 224 (1994); Gross v. Sussex, Inc., 332 Md. 247, 255 , 630 A.2d 1156, 1160 (1993). Where there is no dispute of material fact, however, this Court has stated that the “ ‘standard of review for a grant of summary judgment is whether the trial court was legally correct.’ ” Lippert, 366 Md. at 227 , 783 A.2d at 209 (quoting Goodwich v. Sinai Hosp. of Balt., Inc., 343 Md. 185, 204 , 680 A.2d 1067, 1076 (1996)). See also Grimes, 366 Md. at 72 , 782 A.2d at 833 ; Pence, 363 Md. at 279 , 768 A.2d at 645 ; J. Roland Dashiell & Sons, Inc., 358 Md. at 94 , 747 A.2d at 606 (“ ‘In reviewing the propriety of a summary judgment, it is our responsibility to determine whether there was any issue of fact pertinent to the ruling and, if not, whether the substantive law was correctly applied .... Thus, to be upheld, the summary judgment under review must withstand scrutiny on both its factual and legal foundations.’ ”) (quoting Bloomgarden v. Coyer, 479 F.2d 201, 206-07 (D.C.Cir.1973)) (alteration in original).

We review the trial court’s legal conclusions in rendering summary judgment de novo. Matthews, 359 Md. at 162 , 753 A.2d at 74 (citing Green v. H.R. Block, Inc., 355 Md. 488, 502 , 735 A.2d 1039, 1047 (1999); Calomiris v. Woods, 353 Md. 425, 434 , 727 A.2d 358, 362 (1999)). In the present case, there are no genuine ¹⁷² disputes as to the material facts; therefore, our review is limited to whether the Circuit Court was correct legally in granting Petitioner’s partial motion for summary judgment on liability. Petitioner asserts that § 9-276 imposes strict liability on Respondents, as property owners, for the cleanup costs incurred by the MDE in the removal of the scrap tire site from Respondents’ property.

Petitioner bases its argument on the plain language of § 9-276, corroborated by the legislative history regarding the statute, and further through a comparison of § 9-276 to CERCLA § 9607. Additionally, Petitioner argues that the Court of Special Appeals “erred when it remanded the case to the circuit court to allow the Property Owners to assert ‘applicable’ equitable defenses” because, according to Petitioner, “there are no such defenses that can be asserted with respect to § 9-276.” Respondents, on the other hand, maintain the Court of Special Appeals “correctly determined that [they] were entitled to raise equitable defenses as to the claim brought under § 9-276.” Respondents argue that “[a]s used in § 9-276, the word ‘reimbursed’ is analogous to restitution” and that such an action “seeking a return to the status quo ... constitutes an equitable remedy.” Respondents also maintain that the Legislature did not intend § 9-276(a) to “be a strict liability statute” because “innocent owners were not intended to be responsible persons.” Therefore, according to Respondents, they were entitled to assert equitable defenses at trial. 12 ¹⁷³ We agree with Petitioner that the Circuit Court was legally correct in finding that § 9-276 imposed strict liability on Respondents for the reimbursement of costs for the removal of the scrap tire pile from Respondents’ property. We reverse the judgment of the Court of Special Appeals, and hold further that Respondents were not entitled to assert equitable defenses. B. In 1989, the Maryland State Used Tire Cleanup and Recycling Fund, Md.Code (1996 Repl.Vol., 2001 Supp.), Environment Article, §§ 9-273-9-278, was enacted as an emergency bill in response to the “potential catastrophic environmental risk” constituted by the “stockpiling of used tires.” Bill Analysis, House Bill 491, Reports of the Senate Economic and Environmental Affairs Committee, at 1 (1989).

See also Floor Report on House Bill 491, Reports of the Senate Economic and Environmental Affairs Committee, at 1(1989). The statutory enactment was designed to provide the MDE “with the statutory authority to regulate th[at] risk on a statewide basis” and to “provide a coordinated effort to cleanup the growing number of stockpiles around the State.” Bill Analysis, House Bill 491, at 1. It also was intended to “encourage individuals to recycle used tires and [to] rehabilitate sites currently used to store used tires.” Id. Specifically, the statute provided “financing for the [State Used Tire Cleanup and Recycling] Fund,” provided for “the use of the Fund,” and provided for “the reimbursement of certain moneys expended from the Fund by certain persons.” Chapter 667, Acts of 1989.

Section 9-276, at issue in this case, was included in the original enactment of the State Used Tire Cleanup and Recycling Fund to provide for the “[Reimbursement of costs.” Chapter 667, § 1 of the Acts of 1989. As codified today, it reads: ¹⁷⁴ (a) In general. — Except as provided in subsection (d) of this section, all expenditures from the State Used Tire Cleanup and Recycling Fund made by the Department under § 9-275(a)(l) of this subtitle in response to the storage or disposal of used tires at a particular site shall be reimbursed to the Department for the State Used Tire Cleanup and Recycling Fund by the owner or operator of the site or any other person who caused the tires to be stored or disposed of at the site in violation of this subtitle. (b) Action for failure to make reimbursement. — In addition to any other legal action authorized by this subtitle, the Attorney General may bring an action to recover costs and interest from any person who fails to make reimbursement as required under subsection (a) of this section. (c) Recovery of costs. — The Department may recover costs incurred by the Department under § 9-275(a)(l) of this subtitle whether or not the discarded tires were disposed of or stored at the site before July 1,1989.

(d) Applicability of section. — This section does not apply to expenditures of $10,000 or less related to removal, restoration, or remedial action in response to the disposal or storage of scrap tires in violation of this subtitle if: (1) The owner of the site acquired the property containing the scrap tires prior to January 1, 2000 by inheritance or bequest at the death of the transferor; and (2) The tires were stored or disposed of prior to January 1, 2000. In the present case, our focus is on the scope of liability imposed by § 9-276(a), which mandates that the “owner or operator of the site or any other person who caused the tires to be stored or disposed of at the site in violation of this subtitle” is responsible to the MDE for reimbursement of cleanup costs. In their arguments to this Court and in the courts below, Petitioner and Respondents focus on the similarities and differences between § 9-276 and CERCLA § 9607 in an attempt to glean the intended scope of liability under § 9- ¹⁷⁵ 276(a). See supra note 10 (discussing the reliance of Petitioner and Respondents on CERCLA in interpreting § 9-276).

As we have stated, however, the “cardinal rule of statutory interpretation is to ascertain and effectuate the intention of the legislature,” Oaks v. Connors, 339 Md. 24, 35 , 660 A.2d 423, 429 (1995) (citing Fish Mkt. Nominee Corp. v. G.A.A., 337 Md. 1, 8 , 650 A.2d 705, 708 (1994)), and the “ ‘primary source of legislative intent is, of course, the language of the statute itself.’ ” State v. Pagano, 341 Md. 129, 133 , 669 A.2d 1339 , 1340-A1 (1996) (quoting Tucker v. Fireman’s Fund Ins. Co., 308 Md. 69, 73 , 517 A.2d 730, 731 (1986)). See also Oaks, 339 Md. at 35 , 660 A.2d at 429 .

Therefore, where the words of a statute are “clear and unambiguous, we will give effect to the statute as written,” Oaks, 339 Md. at 35 , 660 A.2d at 429 , and will construe it “ ‘without forced or subtle interpretations designed to extend or limit the scope of its operation.’ ” Giant Food, Inc. v. Dept. of Labor, 356 Md. 180, 189 , 738 A.2d 856, 861 (1999) (quoting Tucker, 308 Md. at 73 , 517 A.2d at 732 ). In this case, the language of § 9-276 is both clear and unambiguous. Therefore, it is unnecessary for us to look to a comparison of § 9-276 to CERCLA § 9607 in order to ascertain its meaning. Id.

(“ ‘[W]here statutory provisions are clear and unambiguous, no construction or clarification is needed or permitted ....’”) (citation omitted). Section 9-276(a) imposes liability for reimbursement on the “owner or operator of the site or any other person who caused the tires to be stored or disposed of at the site in violation of this subtitle.” Respondents’ interpretation of this section would have the clause “who caused the tires to be stored or disposed of at the site in violation of this subtitle” modify all three categories of potential responsible parties described in the statute, i.e. the “owner,” the “operator,” and “any other person.” That interpretation, however, ignores the clear meaning of the structure and relationship of the words as they appear in the statute and does not acknowledge the “generally recognized rule of statutory construction that a qualifying clause ordinarily is confined to the immediately preceding words or phrase — particularly in the absence of a ¹⁷⁶ comma before the qualifying phrase.... ” Sullivan v. Dixon, 280 Md. 444, 451 , 373 A.2d 1245, 1249 (1977) (citing Webb v. City of Baltimore, 179 Md. 407, 409-10 , 19 A.2d 704, 705 (1941)). In consideration of that principle, we are unable to adopt Respondents’ interpretation. The language of § 9-276 does not contain commas setting apart the three categories of potential responsible parties and the modifying clause (e.g. “the owner or operator of the site, or any other person, who caused the tires to be stored ...”), nor does it explicitly apply the modifying clause to all three parties.

In the absence of such context, it is clear that the modifying clause “who caused the tires to be stored ...” was intended to apply only to “any other person.” Consequently, the language of § 9-276(a) mandates that liability for reimbursement to the MDE may be placed on any of 3 categories of persons who violate the subtitle: (1) an owner of a site containing used tires; (2) an operator of a site containing used tires; or (3) any other person who caused the used tires to be stored or disposed of at the site. 13 We conclude, therefore, that § 9-276(a) imposes strict liability on an owner of a used tire site for the reimbursement of monies expended in cleaning up the property, regardless of the owner’s or operator’s culpability in placing or allowing the tires on the property. Had the legislature intended otherwise, it would have indicated as such by clearly setting apart the categories and modifying clause or by explicitly applying the responsibility requirement to all three categories. 14 ¹⁷⁷ C. We now must determine whether Respondents were entitled to assert equitable defenses on their own behalf at trial. Petitioner urges us to rely on the body of federal case law interpreting CERCLA § 9607, notwithstanding certain differences between § 9-276 and the federal statute 15 , for the ¹⁷⁸ proposition that Respondents were not entitled to raise equitable defenses at trial. Specifically, Petitioner argues that because a majority of the federal courts have held that equitable defenses are not available under CERCLA § 9607, we should likewise hold those defenses ar.e not available under § '9-276.

See generally Office of the State Prosecutor v. Judicial Watch, Inc., 356 Md. 118, 138 , 737 A.2d 592, 603 (1999) (“ ‘Where the purpose and language of a federal statute are substantially the same as that of a later state statute, interpretations of the federal statute are ordinarily persuasive.’ ”) (quoting Faulk v. State’s Atty. for Harford County, 299 Md. 493, 506 , 474 A.2d 880, 887 (1984)). Although we stop short of complete acceptance of Petitioner’s argument due to the differences in language and scope between the two stat ¹⁷⁹ utes, an examination of the federal case law surrounding CERCLA § 9607 is useful in our analysis for illustrative purposes. For the reasons stated herein, we agree with Petitioner that Respondents, as liable parties under § 9-276, were not entitled to assert any defenses, including those that are equitable in nature, on their own behalf at trial. As noted earlier, CERCLA “gives the federal government broad power to combat contamination of the environment.” Bausch & Lomb, Inc. v. Utica Mut.

Ins. Co., 330 Md. 758 , 766 n. 2, 625 A.2d 1021 , 1025 n. 2 (1993), petition granted by 346 Md. 28 , 694 A.2d 951 (1997), remanded by 355 Md. 566 , 735 A.2d 1081 (1999) (citation omitted). To effectuate that end, CERCLA § 9607 imposes strict liability on owners and operators of facilities for the reimbursement of all cleanup costs incurred in responding to hazardous substances on their property. See § 9607(a). 16 In addition, it also specifically enumerates defenses available to otherwise liable parties under the statute, including an act of God, an act of War, or an act or omission of a third party.

See § 9607(b). According to the majority of federal circuits interpreting CERCLA § 9607, otherwise liable parties under the statute are limited to raising only those enumerated defenses on their behalf. See, e.g., Axel Johnson, Inc. v. Carroll Carolina Oil Co., Inc., et al., 191 F.3d 409, 413 (4th Cir.1999) (“[PJotentially responsible persons ... are strictly liable for cleanup costs subject only to the statute’s limited defenses.”); Westfarm Assocs. Ltd. P’ship. v. Wash.

Suburban Sanitary Comm’n, 66 F.3d 669 , 677 (4th ¹⁸⁰ Cir.1995) (“Potentially responsible parties ... are strictly liable for cleanup costs, subject only to the statute’s narrow defenses for damages caused solely by acts of God, war, or third parties.”) (emphasis added) (citations omitted); General Elec. v. Litton Indus. Automation Sys., 920 F.2d 1415, 1418 (8th Cir.1990) (“CERCLA is a strict liability statute, with only a limited number of statutorily-defined defenses available.”); U.S. v. Atlas Minerals and Chems., Inc., et al., 797 F.Supp. 411, 417 (1992) (“[T]he statute itself is explicit in stating that the defenses enumerated in § 9607(b) are the only defenses to liability under § 9607(a).”). Those parties, therefore, are not entitled to raise any equitable defenses on their behalf. See, e.g., Town of Munster, Ind. v. Sherwin-Williams Co., Inc., 27 F.3d 1268, 1270 (1994) (holding that “CERCLA does not permit equitable defenses to [§ 9607] liability”); Atlas Minerals and Chems., Inc., 797 F.Supp. at 417 (“[The] introduction [of equitable defenses] into the liability phase of a CERCLA case is improper.”); U.S. v. W. Processing Co., Inc., 734 F.Supp. 930, 939 (1990) (“The listed defenses are the only defenses which are available to avoid liability....

There should be no other defenses, including equitable defenses, that defeat liability....”). Pertinent to the present case, the mass of federal case law surrounding CERCLA § 9607 and the language of the statute itself elucidate the notion that strictly liable parties generally are not entitled to raise any defenses on their behalf, unless such defenses are recognized within the statute itself. Specifically, by expressly enumerating the available defenses in CERCLA § 9607, the drafters of that statute confirmed that all other defenses were not available normally to strictly liable persons. If they were otherwise available, such an enumeration by the legislature would be both unnecessary and superfluous.

By logical extension, therefore, it has been demonstrated that in order to raise equitable defenses to rebut statutorily imposed strict liability, such defenses must be explicitly provided for in the statute itself. See, e.g., U.S. v. DWG Trust Holding Co., No. HAR 93-2859, 1994 WL 395730 , at ², 1994 U.S. Dist. LEXIS 10545 , at ⁶ (D.Md. July 22, ¹⁸¹ 1994) (holding that the “absence of any reference to equitable defenses to liability in the statute therefore precludes them”). If they are not provided for in the statute imposing strict liability, then, due to the absolute liability imposed by the statute, they are not available as a defense to liability or damages at trial.

Id. In our opinion, that rationale is equally applicable to the statute at hand in the present case. Although § 9-276, at the times relevant to the present case, did not enumerate defenses available to strictly liable parties under the statute, their absence does not signify that defenses, specifically equitable defenses, are thus available to otherwise liable parties. Rather, as demonstrated by CERCLA § 9607, unless the use of equitable defenses is specifically provided for in a strict liability statute, a liable party under that statute is not entitled to assert them at trial.

In this case, the legislature did not enumerate any defenses to strict liability under § 9-276. Therefore, due to the strict liability imposed on Respondents by § 9-276, they were not entitled to raise any defenses, including those recognized as equitable in nature, on their behalf at trial. D. In the courts below, Respondents maintained, as an alternative argument, that they were