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Ford Motor Co. v. Trident Barrow Management 22, LLC

United States District Court, E.D. Michigan, Southern Division

March 20, 2018



          Victoria A. Roberts United States District Judge.

         Ford Motor Company (“Ford”), filed a complaint against Trident Barrow Management, LLC (“Trident”) on November 11, 2016. Ford alleges in Count I that Trident's refusal to execute a restrictive covenant upon Ford's request breaches the express terms of an Environmental Cooperation Agreement (“ECA”) between the parties. Ford alleges in Count II that Trident's refusal violated Part 201 of Michigan's Natural Resources and Environmental Protection Act (“NREPA”), MCLA §324.20101 et seq. Ford seeks specific performance and injunctive relief.

         Trident's amended motion for summary judgment (“Motion”) is DENIED.

         I. Background

         In December 2012, Ford sold Trident the majority of the acreage of the former Wixom Assembly Plant (“Wixom Site”), where Ford assembled automobiles from 1957 through 2007. On December 21, 2012, Ford and Trident entered into the ECA. It sets forth obligations of Ford and Trident in remediating the environmental conditions of the Wixom Site. Under Section 2.01(a) of the ECA, Ford agreed, at its own expense, to “use commercially reasonable efforts” to complete remedial actions to ensure that the Wixom Site complied with Part 201 and Part 213 of the NREPA. [Motion, Ex. 3, Pg. 5].

         Section 2.01(b) of the ECA states that the Ford Remediation Activities “may involve the imposition and recording of restrictive covenants and/or the implementation of the institutional controls limiting certain activity on and uses of the Wixom Plant Property.” Id.

         Under Section 3.03(e) of the ECA, Trident agreed to cooperate with Ford in carrying out the Ford Remediation Activities, and to execute upon Ford's request any restrictive covenant that is a component of Ford's Remediation Activities. Id. at 11.

         On July 26, 2016, Ford sent Trident a letter saying that Ford had completed its on-site remediation work; no further Ford Remediation Activities were planned at the Wixom Site. [Motion, Ex. 6, Pg. 1]. Ford attached a restrictive covenant, which, inter alia, would prohibit the site from being developed for residential purposes, and for the site's groundwater to be used for drinking or irrigation purposes. Id. The letter stated that the restrictive covenant to be signed by Trident, would need to be submitted to the Michigan Department of Environmental Quality (“MDEQ”) along with Ford's No Further Action (“NFA”) Reports as required by Part 201 of the NREPA.

         Before signing the restrictive covenant, Trident sought to confirm that Ford had completed its remediation obligations under Section 2.01(a) of the ECA. Trident says that it discovered that Ford submitted Underground Water Storage Tank (UST) Closure Reports, as required by Part 213 of the NREPA, with false information. Specifically, each Closure Report (submitted November 2013, March 2014, and January 2015) cover sheet had this question: “Is site within a wellhead protection zone?” Ford marked “No” to this question on each of the cover sheets. [Motion, Exs. 7, 8]. According to Trident, because the USTs are located within multiple overlapping wellhead protection zones, Ford's answers were false. Ford does not dispute that the Closure Reports initially contained errors, but says these errors were corrected and the reports were approved by the MDEQ in July 2017. Trident says that it also discovered that Ford had not submitted any of its NFA reports to the MDEQ, which means that Ford had not received agency confirmation that its remediation activities had satisfied the cleanup standards of Part 201 of the NREPA. Tridents says that for these reasons, it refused to execute the restrictive covenant.

         Trident filed its Motion on December 21, 2017. Trident argues that Ford's breach of contract claim is foreclosed because: 1) by submitting false Closure Reports, Ford materially breached the ECA; 2) by not submitting its NFA reports, Ford did not obtain confirmation that its remediation activities comply with the NREPA, which is a condition precedent to Trident executing the restrictive covenant. Trident also argues that because it is entitled to summary judgment on Ford's breach of contract claim, it logically follows that it is entitled to summary judgment on Counts II and III.

         Ford responded (“Response”) that: 1) submitting the cover sheets of the Closure Reports with a single error does not materially or substantially breach the ECA; and 2) the language of the ECA does not create a condition precedent, but requires Trident to sign the restrictive covenant upon Ford's request.

         II. Legal Standard

         A. Summary Judgment

         Under Federal Rule of Civil Procedure 56(a), “[t]he Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The movant bears the initial burden to inform the Court of the basis for her motion, and must identify particular portions of the record that demonstrate the absence of a genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant satisfies her burden, the non-moving party must set forth specific facts showing a genuine issue for trial. Id. at 324. A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Unsupported, conclusory statements are insufficient to establish a factual dispute to defeat summary judgment, as is the mere existence of a ...

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