Steve A. Harris Inc v. Kenyon Oil Co Inc , 63 F. App'x 668 ( 2003 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
STEVE A. HARRIS, INCORPORATED; 
THE FASTEST CAR WASH, L.L.C.,
Plaintiffs-Appellants,
v.  No. 02-1957
KENYON OIL COMPANY,
INCORPORATED,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Frederic N. Smalkin, District Judge.
(CA-01-2925-S)
Argued: April 1, 2003
Decided: April 30, 2003
Before TRAXLER and SHEDD, Circuit Judges, and
HAMILTON, Senior Circuit Judge.
Vacated and remanded by unpublished per curiam opinion. Senior
Judge Hamilton wrote a concurring opinion.
COUNSEL
ARGUED: Stuart Scott Morrison, KATTEN, MUCHIN, ZAVIS,
ROSENMAN, Washington, D.C., for Appellants. Patricia Maureen
Weaver, PALEY, ROTHMAN, GOLDSTEIN, ROSENBERG &
COOPER, CHARTERED, Bethesda, Maryland, for Appellee. ON
2 HARRIS v. KENYON OIL CO.
BRIEF: Glenn M. Cooper, PALEY, ROTHMAN, GOLDSTEIN,
ROSENBERG & COOPER, CHARTERED, Bethesda, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Steve A. Harris, Inc. ("Harris") and The Fastest Car Wash, LLC
appeal the judgment entered in favor of Kenyon Oil Company, Inc.
on their breach of contract claim. For the reasons set forth below, we
vacate the judgment and remand for further proceedings.
Harris contracted to purchase from Kenyon Oil a piece of improved
real property located in Silver Spring, Maryland.1 This property had
previously been used in part as a gasoline station, and it was
improved with gasoline station equipment, including several under-
ground storage tanks ("USTs"). The contract provides in pertinent
part that the property was being sold "as is" with one exception: Ken-
yon Oil agreed to be responsible for the removal of the gasoline sta-
tion equipment from the property, and it agreed that "such removal
shall be in compliance with all laws, rules, and ordinances of the Fed-
eral, state and local government, including without limitation the
[Maryland Department of the Environment ("MDOE")]."
After the parties had entered into the contract, Kenyon Oil discov-
ered and reported to MDOE and Appellants that the property was
contaminated. Kenyon Oil thereafter removed five USTs from the
property. As part of this process, Kenyon Oil also removed 82 tons
of contaminated soil from the UST excavation area.
1
Harris subsequently assigned its interest to The Fastest Car Wash,
LLC. We hereafter refer to these parties collectively as "Appellants."
HARRIS v. KENYON OIL CO. 3
The parties then closed the contract. Subsequent to the closing,
MDOE issued a Report of Observations requiring Kenyon Oil to
monitor the groundwater at the property for four consecutive quarters.
The monitoring results have shown that the contamination level on
the property has increased.
Appellants contend that Kenyon Oil breached the contract because
(among other reasons) it has not completed its contractual obligation
to remediate the contamination on the property. Appellants point spe-
cifically to the contractual language that requires Kenyon Oil to
remove the gasoline station equipment — i.e., the USTs — "in com-
pliance with all laws, rules, and ordinances of the Federal, state and
local government, including without limitation, the MDOE," and they
assert that Kenyon Oil’s remediation obligation primarily arises under
§ 26.10.10.03 of the Code of Maryland Regulations ("COMAR").
That MDOE regulation provides that if contaminated soil or ground-
water is discovered during the permanent closure of USTs, then the
owner or operator of the USTs "shall begin corrective action in accor-
dance with COMAR [§] 26.10.09." COMAR § 26.10.10.03(C).2 The
corrective action set forth in COMAR § 26.10.09 is a multi-step pro-
cess that establishes, under proper circumstances, investigation,
reporting, monitoring, and remediation requirements for the UST
owner, operator, or other responsible party.
On the parties’ cross motions for summary judgment, the district
court granted Kenyon Oil’s motion and denied Appellants’ motion. In
its memorandum opinion, the district court held that Kenyon Oil’s
contractual obligation concerning the USTs is limited to the physical
removal of the USTs from the property. The district court stated:
The contract only makes sense as an integrated whole when
the seller’s obligations with regard to the gasoline station
equipment are read as arising only in connection with the
physical removal of the tanks, which . . . plainly does not
comprehend expensive remediation of environmental con-
tamination that predated the removal of the tanks. If such
had been the intention of the parties, they could have used
language that addressed responsibility for remediating envi-
2
Kenyon Oil disputes the applicability of this regulation.
4 HARRIS v. KENYON OIL CO.
ronmental contamination. Instead, they chose to deliver the
property as is, less the gasoline station equipment, which is
exactly what the buyer got, and they limited the seller’s
obligation to restoration, which, in its plain meaning, simply
covers a return to the status quo ante.
Although the district court quoted the section of the contract that
requires Kenyon Oil to remove the USTs "in compliance with all
laws, rules, and ordinances of the Federal, state and local government,
including without limitation, the MDOE," the district court did not
address in any manner either the meaning of this language or the
potential applicability of any MDOE regulation (or other law).
A district court is ordinarily not obligated to address every conten-
tion raised by the parties in a motion. Malbon v. Pennsylvania Millers
Mut. Ins. Co., 636 F.2d 936, 939 n.8 (4th Cir. 1980). However, we
believe that the district court erred by not addressing the "in compli-
ance with" language or the MDOE regulations because these are the
crucial matters upon which Appellants’ claim is based. In light of
Appellants’ arguments, we cannot say that these matters would have
no effect on the outcome of this case.3 The district court may very
well have considered these matters in reaching its conclusion; how-
ever, because it did not explain its analysis, we are unable to satisfy
ourselves that it, in fact, did consider them.
As the case is in this posture, our ability to review the judgment
is hindered. We therefore vacate the judgment and remand this case
to the district court for further proceedings consistent with this opin-
ion. See Whittle v. Timesavers, Inc., 749 F.2d 1103, 1106 (4th Cir.
1984) ("because the district court’s opinion did not adequately discuss
this issue, we reverse the decision of the district court and remand the
case for further proceedings"). We express no opinion on the disposi-
tion of the case on remand.4
VACATED AND REMANDED
3
Because the district court ruled on the motions without oral argument,
we do not have the benefit of a hearing transcript to review to ascertain
whether, and to what extent, the district court considered these matters.
4
On remand, the district court should also reconsider the inextricably
intertwined issue of whether Kenyon Oil breached the contract by failing
to deliver the appropriate certificate at closing.
HARRIS v. KENYON OIL CO. 5
HAMILTON, Senior Circuit Judge, concurring specially:
I concur in the judgment and write separately only to address the
Appellants’ contention, barely mentioned in the majority opinion, see
ante at 4 n.4, that the district court erred by granting summary judg-
ment in favor of Kenyon Oil with respect to the portion of their
breach of contract claim alleging breach of § 2(A)(10) of the contract.
Section 2(A)(10) of the contract required Kenyon Oil to provide the
Appellants, at closing, a certificate from the Maryland Department of
the Environment (the MDOE) "certifying that the Gasoline Station
Equipment, including without limitation, the underground storage
tanks, was removed in compliance with the laws of the State of Mary-
land . . . ." (J.A. 342). Without directly addressing this allegation of
error, the majority opinion merely remands the issue to the district
court with the instruction that "the district court should also recon-
sider the inextricably intertwined issue of whether Kenyon Oil
breached the contract by failing to deliver the appropriate certificate
at closing." Ante at 4 n.4. Unfortunately, this instruction does not
inform the district court that the two alternative bases upon which it
granted summary judgment in favor of Kenyon Oil, with respect to
the portion of the breach of contract claim involving § 2(A)(10), are
erroneous. Without such information and guidance, the district court
may inadvertently repeat the same errors that appear fully in the
record before us on appeal. While not binding on the district court,
an analysis of the § 2(A)(10) issue may prove helpful to the district
court on remand.
The district court first granted summary judgment in favor of Ken-
yon Oil with respect to § 2(A)(10) of the contract on the basis that
Kenyon Oil provided the Appellants with a two-page document that
was issued by the MDOE, dated January 31, 2002, and entitled "CER-
TIFICATE OF REGISTRATION CLOSURE." (J.A. 787). The
Appellants challenge this as error, and I agree. Nowhere does the two-
page document provided by Kenyon Oil state that the MDOE certifies
that Kenyon Oil removed the Gasoline Station Equipment "in compli-
ance with the laws of the State of Maryland . . . ." (J.A. 342). In fact,
language in the document stating that "[t]his Certificate does not
address any active enforcement actions at this site" makes clear that
no such certification was intended by the MDOE. (J.A. 788).
6 HARRIS v. KENYON OIL CO.
Alternatively, the district court relied on the doctrine of waiver in
granting summary judgment in favor of Kenyon Oil with respect to
§ 2(A)(10) of the contract. According to the district court, the Appel-
lants waived their right to enforce § 2(A)(10) of the contract by clos-
ing on the contract without receiving a document as described in
§ 2(A)(10). The district court’s reliance on the doctrine of waiver in
this situation is misplaced. Prior to closing, the parties had expressly
agreed (as evidenced by a letter agreement dated November 13, 2001)
that closing on the contract would not effect a waiver of any parties’
rights and obligations under the contract. Accordingly, the doctrine of
waiver does not provide a proper basis upon which to grant summary
judgment in favor of Kenyon Oil with respect to § 2(A)(10) of the
contract.
On remand, I would allow the district court to consider any and all
other arguments which the parties may offer with respect to Appel-
lants’ contention that Kenyon Oil breached § 2(A)(10) of the contract
by failing to provide them, at closing, with a certificate from the
MDOE "certifying that the Gasoline Station Equipment, including
without limitation, the underground storage tanks, was removed in
compliance with the laws of the State of Maryland . . . ." (J.A. 342).