disclosure obligations and reporting requirements … · disclosure obligations and reporting...

DISCLOSURE OBLIGATIONS ANDREPORTING REQUIREMENTS FOR

ENVIRONMENTAL CONTAMINATION

Sally A LongroyCarrington Coleman Sloman amp Blumenthal LLP

200 Crescent Court Suite 1500Dallas Texas 75201

2148553001slongroyccsbcom

wwwccsbcom

Doing the Real Estate Deal The Ultimate Environmental ToolkitState Bar of Texas

April 20008

Copyright copy 2000 by Sally A Longroy All rights reserved

-i-

TABLE OF CONTENTS

I INTRODUCTION 1

II DISCLOSURE OBLIGATIONS 2A STATUTORY DISCLOSURE OBLIGATIONS 2

1 Residential Property Condition Disclosure 2(a) Improved Property Disclosure 2(b) Unimproved Property Disclosure 2

2 Residential Property Ownersrsquo Association Disclosure 33 Rollback Tax Notice for Vacant Land 34 Lead-Based Paint Disclosure 45 Sellers Disclosure about Storage Tanks 46 Disclosure of CMSWLFs 5

B TORT RISKS FROM NONDISCLOSURE 51 When Nondisclosure Qualifies as Fraudulent Misrepresentation 5

(a) Elements of Fraudulent Misrepresentation 5(b) Defenses to Fraudulent Misrepresentation 8(c) Remedies for Fraudulent Misrepresentation 9

2 When Nondisclosure Qualifies as Negligent Misrepresentation 10(a) Elements of Negligent Misrepresentation 10(b) Defenses to Negligent Misrepresentation 11(c) Remedies for Negligent Misrepresentation 12

3 Statutory Torts 12(a) Deceptive Trade Practices Act 12(b) Fraud in Real Estate and Stock Transactions Act 15

C CONTRACT RISK FROM NONDISCLOSURE 171 Express Warranties 182 As Is Clauses to the Rescue - Perhaps 183 Indemnification 21

(a) Construction of Clauses 21(b) CERCLA Liability Indemnification 21

D CERCLA LIABILITY AND NONDISCLOSURE 221 CERCLA Liability 222 Disclosure Issues Affecting Liability Allocation 22

(a) Innocent Landowner Defense 22(b) Intervening Landowners 23

II REPORTING REQUIREMENTS 23A REPORTING RELEASES FROM STORAGE TANK SYSTEMS 24B REPORTING NON-TANK RELEASES 24C REPORTING CMSWLFS 25

Disclosure Obligations and Reporting Requirements for Environmental Contamination 8-1



Sally A Longroy sellers to tell all and give full disclosure of known or1

suspected environmental conditions

I INTRODUCTION

The presence of known or suspectedenvironmental contamination on real property candepress the price that can be garnered from the saleof the land prevent a prospective purchaser fromdeveloping the property as planned at least withoutthe possibility of incurring additional expense andcan significantly complicate the negotiations of atransfer As a result buyers have tended to avoidenvironmentally challenged sites in favor of pristineproperties But the increased market for inner-cityproperties and implementation of several newprograms to encourage brownfield redevelopmenthave created new opportunities for owners of ldquogreyacrerdquo to move their lands into the hands ofdevelopers with visions of transforming these oldindustrial tracts into havens for businesses orhomeowners

It is no news to anyone that in a typical realestate deal the sellerrsquos goals conflict andsometimes noisily collide with the buyerrsquos goalsThe seller will usually wish to maximize price andwash its hands of all liability associated withownership or operation of the property To thecontrary the buyer will seek to minimizeexpenditures on acquiring the land in order to retainavailable assets for development activities Buyersusually try to avoid assuming any liabilities thatmight arise from its property ownership particularlyif those risks might be associated with any formerownership or operation of the property prior to thebuyer taking title Although some efforts areunderway to narrow the scope of potentialenvironmental liabilities arising simply fromproperty ownership and to protect buyers ofproperties with hidden environmental defects it2

remains true that the mere ownership of a

contaminated site can bring with it a host of costlyinvestigatory or remedial obligations possible landuse restrictions and vulnerability to legal actionsConsequently buyers will often attempt to force

The sellerrsquos goals create incentives for theseller to hide the ball concerning a propertyrsquosenvironmental conditions and becausecontamination may not be readily discoverablethrough typical environmental due diligence a sellermay successfully be able to postpone a buyerrsquosdiscovery until after closing Although Phase Ienvironmental site assessments which have3

become routine in commercial sales transactionscan and do reveal significant information about thehistorical uses and potential sources ofcontamination a seller may have unique access toenvironmental information For example unless aconspicuous vent pipe is present old undergroundstorage tanks cannot be readily detected from thesurface or necessarily found from old records Ora seller may retain information about past dumpingpractices on the back forty which could haveresulted in the migration of contaminants to thesubsurface but surficial evidences has faded fromview And unless you know where to look a fullenvironmental investigation of property can beexpensive and still not reveal all potential sources ofliability4

This paper will address the sellers legalobligations to disclose environmental information tobuyers in transactions involving the sale of realproperty as well as the potential legal risks that mayarise as a result of a failure to disclose Separatelyit includes a discussion of some of the morecommon reporting responsibilities that may betriggered as a result of intelligence gained during abuyerrsquos due diligence activities

Many thanks to Christopher T Nixon for his1

valuable assistance in the preparation of this paper

See eg TEX HEALTH amp SAFETY CODE ANN disposal practices 42 USC sect 9607 (1997) Anspec2

Ch 361 Subchapter V (Vernon Supp 2000) (Texasrsquo Co v Johnson Controls Inc 922 F2d 1240 (6th Cirinnocent owner program) 1991)

Phase I ordinarily refers to a non-invasive3

investigation about the historical condition and use of thesite under investigation as well as surrounding areas thatmay impact the environmental condition of the property

Under successor liability theories environmental4

liabilities may also arise from an ownerrsquos off-site disposalactivities therefore a buyer may be forced to rely oninformation provided by the seller concerning past

8-2 Doing the Real Estate Deal The Ultimate Environmental Toolkit

Research for this paper stopped on March 1 form of the notice is included with this paper at2000 so any developments after that date are not Exhibit A If the notice is not executed andincluded The research is not warranted to be provided to the purchaser on or before the date thecomprehensive but is intended more as a starting contract binds the purchaser to buy the property theplace for evaluating potential disclosure or reporting purchaser may terminate the contract for any reasonobligations Any opinions expressed are my own within seven days after receiving the notice Theand have not been reviewed or approved by my firm rules of Section 5008 require that the seller discloseor anyone else to the purchaser to the best of its knowledge the

II DISCLOSURE OBLIGATIONS

B STATUTORY DISCLOSURE OBLIGATIONS

During the past decade the Texas Legislaturehas imposed several statutory duties on sellers todisclose information to buyers of real property Notsurprising most of these provisions are targeted toprotect unsophisticated residential buyers Themore frequently applicable provisions are discussedin this paper and the rest may be found in Title 2 tothe Texas Property Code New federal disclosure5

measures have also been implemented to makebuyers aware of potential lead-based paint hazards6

1 Residential Property Condition Disclosure(a) Improved Property Disclosure

In the typical sale of a residence in Texas ahomeowner has a statutory duty to disclose to theprospective purchaser certain physical conditionsexisting on the property being sold Section 50087

of the Texas Property Code requires the seller of asingle-family dwelling to provide on or before theeffective date of an executory purchase and salecontract certain disclosures about the property tothe prospective purchaser The minimal statutory8

9

existence and condition of certain features defectsor sources of potential problems on the propertysuch as appliances fire detection equipment airconditioning units plumbing facilities rain gutterswater heaters improper drainage and aluminumwiring The seller must also disclose specific10

environmental conditions existing on the propertysuch as hazardous or toxic waste urea formaldehydeinsulation radon gas asbestos and lead-basedpaint

(b) Unimproved Property DisclosureA seller of unimproved property intended for

residential development must disclose ldquothe locationof a transportation pipeline including a pipeline forthe transportation of natural gas natural gas liquidssynthetic gas liquefied petroleum gas petroleum ora petroleum product or a hazardous substancerdquo tothe best of the sellerrsquos belief and knowledge as ofthe date of the notice As is often the case with11

Texas statutes and depending on your perspectivethis language can be read a couple of different wayseither requiring disclosure of only the location of apipeline transporting various substances (includinghazardous substances) or the location of pipelinesor hazardous substances In any event the noticerequirement may be avoided if the earnest moneycontract obligates the seller to provide a titlecommitment and grants the buyer an opportunity toterminate the contract if the seller fails to curebefore closing the buyerrsquos permitted objections totitle If the notice is not provided on or before the12

effective date of the contract the buyer wins a free

See TEX PROP CODE ANN sectsect 5008-012 5091-5

094 (Vernon Supp 2000) For properties outside thecorporate boundaries of a municipality sellers mustdisclose the potential for annexation Id sect 5011 Forproperties in certain low income counties nearinternational borders specific disclosure notices must begiven Id sect 5091-094

42 USC sect 4852d (1989 amp Supp 1999)6

A limited category of residential property7

transfers are exempt from the disclosure requirementssuch as those made pursuant to a court order orforeclosure by a trustee in bankruptcy and by one co-owner to one or more other co-owners TEX PROP CODE

ANN sect 5008(e) (Vernon Supp 2000)

Id sect 50088

Id sect 5008(f)9

Id sect 5008(b)10

Idsect 5010(a)-(b)11

Id sect 5010(f)12


termination right within seven days after the provide statutory notices the legislature has madeeffective date of the contract the buyerrsquos free termination right at any time within13

2 Residential Property Ownersrsquo AssociationDisclosureSellers of single family dwellings that are

subject to membership in a property ownersrsquoassociation must provide notice of such restrictionsat some point before the buyer becomes obligated topurchase the property The notice must be made14

in language substantially similar to the following

NOTICE OF MEMBERSHIP IN PROPERTY OWNERSASSOCIATION CONCERNING THE PROPERTY AT

(street address) (name of residential community)

As a purchaser of property in theresidential community in which thisproperty is located you are obligated tobe a member of a property ownersassociation Restrictive covenantsgoverning the use and occupancy of theproperty and a dedicatory instrumentgoverning the establishmentmaintenance and operation of thisresidential community have been or willbe recorded in the Real Property Recordsof the county in which the property islocated Copies of the restrictivecovenants and dedicatory instrument maybe obtained from the county clerk

You are obligated to payassessments to the property ownersassociation The amount of theassessments is subject to change Yourfailure to pay the assessments could resultin a lien on and the foreclosure of yourproperty

Date _________Signature of Purchaser

As with the rollback property condition and taxnotices discussed below certain types of transfersare exempt from these notice obligations But15

unlike the other remedies for sellerrsquos failure to

seven days from receipt of the notice or beforeclosing the buyerrsquos exclusive remedy16

3 Rollback Tax Notice for Vacant LandExcept in limited circumstances contracts for

the sale of vacant land must include the followingbold-faced notice

NOTICE REGARDING POSSIBLE LIABILITY

FOR ADDITIONAL TAXES

If for the current ad valorem tax year thetaxable value of the land that is thesubject of this contract is determined by aspecial appraisal method that allows forappraisal of the land at less than itsmarket value the person to whom theland is transferred may not be allowed toqualify the land for that special appraisalin a subsequent tax year and the land maythen be appraised at its full market valueIn addition the transfer of the land or asubsequent change in the use of the landmay result in the imposition of anadditional tax plus interest as a penaltyfor the transfer or the change in the use ofthe land The taxable value of the landand the applicable method of appraisalfor the current tax year is publicinformation and may be obtained fromthe tax appraisal district established forthe county in which the land is located17

Like the property condition and propertyowners association disclosure notices certain typesof transfers are exempt from the requirements ofthis provision The statutory language of the18

notice may also be omitted if the contract includes aseparate paragraph that provides for ldquopayment ofany additional ad valorem taxes and interest thatbecome due as a penalty because of (1) the transferof the land or (2) a subsequent change in the use of

Id sect 5010(c) Id sect 5012(d)-(e)13

Id sect 5012(a)-(b) Id sect 501014

Id sect 5012(c) Id sect 5010(b)-(c)15

16

17

18


the landrdquo If a seller fails to include the statutory forms may be found on the National Safety19

notice in the contract for sale the transferee may C o u n c i l rsquo s w e b s i t e a trecover the amount of additional taxes and interestresulting from any transfer of the land or asubsequent change in use that occurs within fiveyears of the date of the transfer20

4 Lead-Based Paint DisclosureFederal law requires that a seller of residential

property that was built prior to 1978 provide thepurchaser with notice that the property may containlead-based paint that may cause lead poisoning inyoung children The seller of any such property is21

required to provide the purchaser with a federallyapproved written lead-based paint warning andhazard information pamphlet disclose to thepurchaser any known lead-based paint or any lead-based paint hazards on the property and permit thepurchaser a ten (10) day period (or such othermutually agreeable time period) to inspect theproperty for the presence of lead-based painthazards The sellers disclosure must be separately22

attached to the purchase and sale contract and besigned by the seller and purchaser Although the23

validity of the purchase and sale contract isunaffected by the sellers failure to provide suchdisclosures to the purchaser a seller who24

knowingly violates the lead-based paint disclosurerequirements may be liable for among other thingstreble damages to the purchaser and may face civilmonetary penalties under section 102 of theDepartment of Housing and Urban DevelopmentReform Act of 1989 (42 USC sect 3545) 25

Detailed information about the disclosure rules and

httpwwwnscorgehcnlicdisclosehtm

5 Sellers Disclosure about Storage TanksStorage tank system regulations require that

any person who sells or otherwise conveys realproperty on which a regulated underground storagetank is located and any person who sells or conveysa regulated tank which is designed or intended to beinstalled as an underground storage tank mustprovide the purchaser thereof with written notice ofa tank owners obligations under the TexasAdministrative Code with respect to registration andconstruction notification The Texas Natural26

Resource Conservation Commission (the ldquoTNRCCrdquoor ldquoCommissionrdquo) has deemed the followinglanguage to be sufficient to meet this disclosurerequirement ldquoThe underground storage tank(s)which are included in this conveyance are presumedto be regulated by the Texas Water Commission andmay be subject to certain registration andconstruction notification requirements found in 31Texas Administrative Code Chapter 334rdquo Note27

that although the citation in the approved languageis to Title 31 of the Code the regulations mayactually be found in Title 30

6 Disclosure of CMSWLFsAn owner of land that overlies a closed

municipal solid waste landfill facility (ldquoCMSWLFrdquo)must place record notice of restrictions on thedevelopment or lease of the land in the real propertyrecords of the county in which the land is located28

The owner must also notify each occupant of anystructure overlying the CMSWLF of the landrsquosformer use and the structural controls in place tominimize hazards posed Failure to comply with29

Id sect 5010(d) In attempting to avoid the19

statutory language but shift rollback tax liability from theseller practitioners should review their roll-back taxlanguage to be sure it covers the allocation of interest

Id sect 5010(e)20


Id sect 4852d(a) The purchaser may also waive22

such inspection rights Id sect 4852d(a)(1)(C)

Id sect 4852d(a)(2)23

Id sect 4852d(c)24

Id sect 4852d(b)(1)-(3)25

30 TEX ADMIN CODE sect 3349 (1998) Certain26

tank systems are exempt from regulation by the TNRCCsuch as small-capacity farm or residential tanks used forstoring motor fuel for noncommercial purposes see TEXWATER CODE ANN sect 26344 (Vernon Supp 2000) for amore complete list of exempt tanks

30 TEX ADMIN CODE sect 3349(4) (1998) 27

TEX HEALTH amp SAFETY CODE ANN28

sect 361539(a) (Vernon Supp 2000)

Id sect 361539(b)29


the statute can result in civil penalties not to exceed (1) a material representation was made (2) the$10000 for each violation representation proved to be false (3) the speaker30

C TORT RISKS FROM NONDISCLOSURE

1 When Nondisclosure Qualifies as FraudulentMisrepresentationTexas common law imposes a duty upon

sellers to refrain from any misrepresentations intransactions involving real property Naturally anexpress misrepresentation may be actionable but inaddition under circumstances where nondisclosureresults in deception a sellerrsquos awareness ofinformation material to a buyers decision whether tothe purchase property may also give rise to liabilityif not disclosed Additionally although the authorrsquosresearch has not uncovered a Texas case on pointTexas courts may also hold a seller accountable forselectively disclosing information in such a way asto be misleading For example in VSH Realty31

Co v Texaco Inc a buyer was held to state aclaim for misrepresentation where a seller made onlypartial disclosures concerning oil leaks and failed toacknowledge a Coast Guard investigation32

Applying Massachusetts law the First Circuitindicated that half-truths or partial disclosures wereinadequate where full acknowledgment wasnecessary to avoid deception33

(a) Elements of Fraudulent MisrepresentationTexas courts recognize a presumption in favor

of the fairness of the transaction that must beovercome by the complaining party As a general34

rule for a buyer to recover on a fraudulentmisrepresentation claim the buyer must show that

35

knew the statement to be false when it was made ormade it recklessly without any knowledge of thetruth (4) the speaker made the representation with36

intent that the other party act in reliance upon it (5)the other party acted in reliance on the statementand (6) the other party thereby suffered injury 37

For a buyer to successfully bring a cause of actionfor fraud based on the sellers nondisclosure ofinformation one additional requirement attachesThe buyer must show that a duty to disclose theinformation existed because either the defect wasnot discoverable by the exercise of ordinary care anddiligence on the part of the purchaser or there38

existed a confidential or fiduciary relationshipbetween buyer and seller Alternatively the buyer39

may be able to pursue a claim for active fraudulentconcealment To succeed in a fraudulent40

concealment claim instead of proving the existenceof a confidential relationship a buyer mustdemonstrate that the seller had actual knowledge of

Id sect 361540(a) Bad faith is not an element of actionable fraud30

JENNIFER L MACHLIN amp TOMME R YOUNG31

MANAGING ENVIRONMENTAL RISK - REAL ESTATE AND

BUSINESS TRANSACTIONS sect 903[1][a][ii] (1990) see Trenholm 646 SW2d at 930 Stone v LawyersGodfrey v Steinpress 128 Cal App 3d 154 182 Title Ins Corp 554 SW2d 183 185 (Tex 1977)(1982) Gilbert v Corlett 339 P2d 960 962 (Cal CtApp 1959)

757 F2d 411 415 (1st Cir 1985)32

Id33

Stone v Lawyers Title Ins Corp 537 SW2d SW2d 323 326 (Tex Civ App--Fort Worth 1932 no34

55 65 (Tex Civ App--Corpus Christi 1976) affd in writ) see also W Page Keeton Fraud--Concealmentpart revd in part 554 SW2d (Tex 1977) and Nondisclosure 15 TEX L REV 1 2-5 (1936)

Pure expressions of opinion are not actionable35

Trenholm v Ratcliff 646 SW2d 927 930 (Tex 1983)(noting that there are exceptions to this general rule suchas when the speaker knows the opinion to be false orwhen the speaker purports to have special knowledge asto the happening of future events)

36

Polk Terrace Inc v Harper 386 SW2d 588 593 (TexCiv App--Tyler 1965 writ refd nre)

37

Smith v National Resort Communities Inc 58538

SW2d 655 658 (Tex 1979)

Stone 537 SW2d at 6739

Ten-Cate v First Natl Bank of Decatur 5240


the facts allegedly concealed and a fixed purpose cleanup standards become more stringent41

to conceal the wrong Consequently if the primary goal is to avoid a later42

(1) Materiality of the Defect disclosing even seemingly insignificantAs one would expect whether a defect is contamination

material is a question of fact Although no one can43

ever guess exactly what might influence a juryrsquos (2) Sellers Knowledge about the Defectdecision the question should turn on whether the Before a seller can be held accountable fordefect would alter the buyerrsquos decision to make the fraudulent misrepresentation the seller must have atpurchase without substantial change in the agreed least some knowledge of the defect Althoughterms Although it may not necessarily be Texas courts have not clarified the degree ofactionable to withhold information about low levels knowledge required some courts outside Texasof contamination it is difficult to imagine many have held that the knowledge element includes bothsituations where a buyer would not want to know of actual and constructive knowledge based onthe presence of hazardous materials on property as currently available information Constructivean important factor to consider in its analysis of knowledge includes knowledge that would bewhether to purchase a site or the terms negotiated available upon the exercise of ordinary care Such44

For example the contamination may be substantial precedent could impose some affirmative duty onenough to substantially reduce the purchase price for sellers to conduct some level of investigation basedthe property Caution too is advised in on constructive knowledge of an environmental45

withholding information about a previously condition at least with regard to readily availableremedied hazardous condition because the minute information No courts have gone so far howeverpresence of hazardous substances may later become to impose a duty to disclose speculation aboutmaterial if either the remedial measures fail or known facts If a seller has actual knowledge of a

46

fraud claim a cautious seller might err on the side of

47

48

49

50

Hay v Shell Oil Co 986 SW2d 772 778 (Tex41

App--Corpus Christi 1999 no writ) Baskin v Mortgageand Trust Inc 837 SW2d 743 746 (Tex App--Houston [14th Dist] 1992 writ denied) Texas GasExploration Corp v Fluor Corp 828 SW2d 28 32-33(Tex App--Texarkana 1991 writ denied) Rascoe vAnabtawi 730 SW2d 460 462 (Tex App--Beaumont1987 no writ)

Baskin 837 SW2d at 746 (citing Carrell v42

Denton 157 SW2d 878 879 (1942))

Id43

Id44

MACHLIN amp YOUNG supra note 3145

sect 903[1][a][i] See Reed v King 145 Cal App 3d 261 MACHLIN amp YOUNG supra note 31268 (1983) (denying sellers motion to dismiss a case on sect 903[1][a][ii] Easton v Strasberger 152 Cal App 3dgrounds of materiality where the seller failed to disclose 90 (1984) (requiring sellers agent to inspect residentialthe fact that multiple murders had been committed in the property and disclose known material facts affecting thehome and the nondisclosed occurrence had a measurable value or desirability of the property but not requiringeffect on the market value of the property) Further to speculation about known facts) [A] seller shouldavoid misrepresentation even where a defect is non- ascertain and disclose site conditions that could indicatematerial the seller may be required to honestly disclose the presence of hazardous substances but need notthe defect in response to a question or statement by the speculate or conduct investigations concerning the importbuyer MACHLIN amp YOUNG supra note 31 sect 903[1][a] of red flags MACHLIN amp YOUNG supra note 31 sect

Id In a California case a developer fully46

disclosed to the buyer that property had been filled butdid not disclose water and slide problems in the fillbecause he believed he had remedied these problemsWhen sliding later occurred the California court allowedsuit against the seller for fraudulent nondisclosureBarnhouse v City of Pinole 133 Cal App 3d 171 190(1983)


sect 903[1][a][ii]

Id see Clauser v Taylor 112 P2d 661 66248

(1941)

BLACKS LAW DICTIONARY 284 (5th ed 1979)49

Attoe v State Farm Mutual Auto Ins Co 153 NW2d575 579 (Wis 1967)

50


defect the seller must disclose it if not reasonably justified that partys reliance on the other party todiscoverable But a seller on notice of a possible act in his best interest environmental condition in a jurisdiction that mayrequire only construction knowledge to support a (4) Reasonable Observability of the Defectclaim for fraud must evaluate whether the A disclosure duty may arise if a defect is notinformation available constitutes constructive reasonably discoverable by the buyer Thisknowledge creating a duty to investigate or disclose requirement derives from the presumption thator mere speculation about known facts sellers are often in unique proximity to definitive

(3) Existence of a Confidential Relationship available to buyers even upon thoroughCreating a Disclosure Duty investigation It has long been the law in Texas that business The obviousness of a fact or condition may

dealings creating confidential relationships impose depend in part upon the sophistication andfiduciary duties and obligations on the parties to experience of the buyer and the resulting extent ofeach other A confidential relationship may also the buyers duty to investigate As a general51

arise when representations are made recklessly matter courts tend to find defects less readilywithout knowledge of the truth and as positive observable when residential buyers are involvedassertions of fact provided they are made with the Residential buyers are often presumed to be lessintent that the other party act upon those sophisticated expected to have little expertiseassertions At least one Texas court of appeals relevant to possible defects and are thereby52

has refused however to find a confidential accorded maximum protection by the courts Inrelationship in an arms-length transaction involvingsophisticated parties The Houston court53

emphasized that a fiduciary relationship was anextraordinary one that it would not be lightlycreated and must be based on something more thanobjective trust The court stated that before an54

informal fiduciary relationship would arise thecomplaining party must show that the dealingsbetween the parties continued for enough time that

55

56

information about the site that may not be readily

57

58

59

60

903[1][a][ii] (1990) It has been suggested red flagsnot requiring investigation might include visibleirregularities such as areas of soil lacking vegetation Kubinsky v Van Zandt Realtors 811 SW2ddiscolored soil stunted or blighted vegetation oddly 711 714-15 (Tex App--Fort Worth 1991 writ denied)colored bodies of water improperly constructed wastemanagement facilities and an absence of measures toprevent fuel contamination Id sect 18 It is unclear howsignificant red flags might be before triggering aninvestigation duty

Stone 537 SW2d at 74 (citing MacDonald v51

Follet 180 SW2d 334 (1944))

Id52

Stephanz v Laird 846 SW2d 895 902 (Tex53

App--Houston [1st Dist] 1993 no writ)

Id at 901-02 1981) Some courts have permitted buyers to pursue54

Id at 90255


sect 903[1][a][iii] see VSH Realty 757 F2d at 411(allowing misrepresentation claim where seller failed todisclose oil discharges even though purchaser wassophisticated had inspected the property prior to the saleand had accepted it as is without warranty) Cf SmithLand amp Improvement Corp v Celotex Corp 851 F2d86 88 (3d Cir 1988) cert denied 488 US 1029(1989) (denying buyers claim against seller where theseller made no attempt to hide a hazardous waste dumpon property the buyer inspected the property severaltimes and the waste pile was obvious)

57


sect 903[1][a][iii]

Id 59

Id Philadelphia Elec Co v Hercules Inc 76260

F2d 303 313-14 (3d Cir) cert denied 474 US 980(1985) (acknowledging that the doctrine of caveat emptoris inapplicable in the sale of new homes by builder-vendors but that caveat emptor remained the rule forcorporations of roughly equivalent resources in a contractfor sale of industrial property) see Easton 152 Cal App3d at 90 Schnell v Gustafson 638 P2d 850 (Colo App


one Texas case for example an appellate court Nonetheless a buyers failure to inspect for defectsaffirmed the trial courtrsquos decision finding that a is not often a defense to fraud Thus a sellerdeveloper was 100 liable to a home-owner for guilty of making an express fraudulent statement oflosses caused by hazardous waste Liability was fact may not assert that the buyer could have learnedimposed for developing a residential subdivision the truth if the defrauded party had diligentlynext to a chemical plant whose operations were open investigated The Fort Worth Court of Appealsand obvious and for failing to advise potential put it this way home-buyers that the facility stored chemicalbyproducts on the premises Conversely It is not the rule that a person injured by61

commercial buyers are presumed to possess the fraudulent and false representations ofadequate sophistication to realize that third party another is held to the exercise of diligenceexperts may be needed to evaluate environmental to suspect and discover the falsity of suchconditions Therefore in deciding whether a statements In the absence of knowledge62

possible defect is reasonably observable the seller to the contrary he would have a right tomust consider the relative sophistication of the rely and act upon such statements andparties to the transaction certainly the wrongdoer in such a case

(b) Defenses to Fraudulent Misrepresentation should have disbelieved his solemnA seller may be able to defeat a buyers fraud statements

claim and avoid liability if it can establish that thedefect was immaterial the seller had no knowledge So to defend against fraud a seller who hasof the defect or because of the nature of the defect committed an affirmative misrepresentation may bethe expertise of the buyer or the relationship at the mercy of the buyer in the absence of abetween the parties there was no duty to disclose showing that the buyer actually knew the63

64

65

cannot be heard to complain that the other

66

representation was untrue when made 67

The buyers duty to investigate as a defense isless clear if the seller simply fails to disclosematerial information The courts which have

damages for a sellers nondisclosure in cases whereresidential buyers had an apparent opportunity todetermine defects for themselves See SettlementCosman v Chevron No 37-48-92 (Cal Super CtOrange County 1986 filed Mar 24 1982) New Jerseyv Ventron Corp 468 A2d 150 157 (NJ 1983)Easton 152 Cal App 3d at 90

Barras v Monsanto 831 SW2d 859 867 (Tex61

App--Houston [14th Dist] 1992 writ denied) Thedevelopers did not appeal the evidentiary support for thejury answer however so it is not totally clear if theappellate court would have affirmed had the developersdone so

Celotex 851 F2d at 88 (finding that buyer62

should have tested the large waste pile on property) Stateof New York v Shore Realty Co 759 F2d 1032 1048-49 (2d Cir 1985) (holding that the buyer should haveknown to inspect drums and waste on property) But seeVSH Realty 757 F2d at 411 (allowing defeated by an assertion that the buyer could have easilymisrepresentation claim where buyer repeatedly ascertained the condition of the roof by a personalquestioned seller about oil leaks and seller responded inspection)with only partial disclosure) Ventron 468 A2d at 166(concluding that contamination from mercury processing Western Cottage Piano amp Organ Co vwas not obvious to a commercial purchaser who knew of Anderson 101 SW 1061 1064 (Tex Civ App--Fortthe prior use of the site) Worth 1907 writ denied)

MACHLIN amp YOUNG supra note 31 sect 903[1][a] Koral 802 SW2d at 65163

Koral Ind v Security-Connecticut Life Ins Co64

802 SW2d 650 651 (Tex 1990) Trenholm 646SW2d at 933 Both the Koral and Trenholm courtsreferred to the general rule stated in Isenhower v BellWhere one has been induced to enter into a contract byfraudulent representations the person committing thefraud cannot defeat a claim for damages based upon aplea that the party defrauded might have discovered thetruth by the exercise of proper care Isenhower v Bell365 SW2d 354 357 (Tex 1963)

Wright v Carpenter 579 SW2d 575 580 (Tex65

Civ App--Corpus Christi 1979 writ refd nre)(holding that a fraudulent misrepresentation claimconcerning the quality of the roof of a house could not be

66

67


addressed the issue tend to allow buyers to rely on to have accepted all risks that such an investigationaffirmative representations by the seller as to would have revealedmatters not subject to reasonable inquiry and this68

entitlement applies to both sophisticated and (c) Remedies for Fraudulent Misrepresentationunsophisticated purchasers Sophistication and Two different measures of damages are69

expertise of the buyer may have an impact however allowed in Texas for fraudulent misrepresentationon the buyers measure of duty to conduct its own The injured party may recover damages measuredinvestigation because the buyers sophistication either as out of pocket damages or benefit of thedetermines what matters are reasonably bargain damages Courts calculate out ofdiscoverable For instance a residential buyer pocket damages as the difference between the70

may rely on the seller to provide information rather amount paid and the value received Alternativelythan conduct its own investigations while a benefit of the bargain damages are determined as71

commercial buyer may have a duty to conduct its the difference between the value represented and theown investigation The effect of no inquiry where value actually received 72

a investigative duty arises can be devastating In addition a plaintiff may recover special orSome courts have deemed the buyer to have consequential damages shown to be the proximateaccepted all risks that such an investigation should result of the misrepresentation The Texashave disclosed which means that a seller who fails supreme court has also awarded the equitable73

to disclose material information may be able to remedy of rescission where the seller failed toconvince a court that because of the buyers disclose an existing fact where there was a duty tosophistication and expertise the buyer had a duty to speak This remedy was based on the theory ofconduct its own investigation and should be deemed equitable estoppel where silence was found to be as

74

75

76

77

78

79

misleading as a positive misrepresentation80

Finally by successfully bringing a fraud claim thebuyer may also recover punitive damages A81


sectsect 903[2][a] 903[3] Gauerke v Rozga 332 NW2d804 809-10 (Wis 1983) Greenwood Mills Inc vRussell Corp 981 F2d 148 150-51 (4th Cir 1993)(allowing sophisticated buyer to rely on sellersaffirmative misrepresentations although the jury foundthe seller did not affirmatively mislead the buyer) If thebuyer investigates anyway he may be charged withinformation thereby obtained See eg Carpenter vHamilton 62 P2d 1397 1399 (Cal App 1936)


sectsect 903[2][a] 903[3] Gauerke 332 NW2d at 809-10Greenwood Mills 981 F2d at 150-51 see egCarpenter 62 P2d at 1399

MACHLIN amp YOUNG supra note 31 sect 903[2][a]70

Chapman v Hosek 475 NE2d 593 599 (Ill71

App 1985) Easton 152 Cal App 3d at 90

Shore Realty 759 F2d at 1048-49 Celotex 85172

F2d at 86 VSH Realty 757 F2d at 414


Celotex 851 F2d at 88 Philadelphia Elec 762 F2d at actual damages suffered Nolan v Bettis 577 SW2d312-13 Edward Hines Lumber Co v Vulcan Materials 551 556 (Tex App--Austin 1979 writ refd nre)Co 669 F Supp 854 (ND Ill 1987) (upholding exemplary damages in the amount of $25000

See Shore Realty 759 F2d at 1048-49 Celotex74

851 F2d at 88 VSH 757 F2d at 414 PhiladelphiaElec 762 F2d at 312-13 Hines Lumber 669 F Suppat 854

Formosa Plastics Corp USA v Presidio75

Engineers and Contractors 960 SW2d 41 49 (Tex1998)

Id at 4976

Id77

Libhart v Copeland 949 SW2d 783 800 (Tex78

App --Waco 1997 no writ) El Paso Dev Co v Ravel339 SW2d 360 367 (Tex Civ App--El Paso 1992writ refd nre)

National Resort 585 SW2d at 65879

Id80

TEX CIV PRAC amp REM CODE ANN sect 4100381

(Vernon Supp 2000) In the past punitive damageswere only required to be reasonably proportioned to the


showing of intent to harm is unquestionably Though the elements of negligentsufficient to support an award of punitive misrepresentation are similar to those for fraudulentdamages But a mere showing of a conscious misrepresentation they differ in several important82

indifference to the rights of others has also been respects A negligent misrepresentation claim isheld sufficient to support exemplary damages more narrow because it is limited to commercial83

2 When Nondisclosure Qualifies as NegligentMisrepresentation

(a) Elements of Negligent MisrepresentationFor some time Texas courts have recognized

a cause of action for negligent misrepresentation84

The courts have adopted the Restatement (Second)of Torts section 552s definition of negligentmisrepresentation as when (1) one in the course ofbusiness supplies false information for the guidanceof others in their business transaction (2) fails toexercise reasonable care or competence in obtainingor communicating the information (3) the claimantjustifiably relies on the false information and (4)the claimant thereby suffers pecuniary loss 85

sellers It may however be more readily availableto some commercial buyers than an ordinary fraudclaim because it imposes a duty on sellers to usereasonable care and competence in both acquiringand disclosing information it does not specificallyrequire that the information be material and it doesnot require a showing of intent on the part of theseller that the buyer rely on the misrepresentationConsequently a seller could be held accountable fornegligently failing to disclose information and maybe held to a higher standard of care than in the caseof a fraudulent misrepresentation claim

Texas court have held that sellers of real estatehave an affirmative duty to disclose material factswhich would not be discoverable by the exercise ofordinary care and diligence on the part of thepurchaser or which a reasonable investigation andinquiry would not uncover Although it does not86

appear that a court has had reason to go this far itis troubling that the negligent misrepresentationelement requiring the seller to use reasonable careand competence in acquiring information couldconceivably be read to impose upon sellers someaffirmative duty to investigate

Though the author has found no Texas caselaw on the application of negligentmisrepresentation in the environmental context it iscertainly conceivable that the theory could besuccessfully applied to the negligentmisrepresentation or nondisclosure of environmentalcontamination in a real estate transaction The87

elements are clearly drafted to apply to affirmativestatements that are or turn out to be false And a88

based on actual damages of only $2000) The Texaslegislature has recently put a cap on punitive damages forfraud at the greater of four times actual damages or$200000 TEX CIV PRAC amp REM CODE ANN sect 41007(Vernon Supp 2000)

Dennis v Dial Finance amp Thrift Co 401 SW2d82

803 805 (Tex 1966)

Burk Royalty Co v Walls 616 SW2d 911 92083

(Tex 1981)

Geosearch Inc v Howell Petroleum Corp 81984

F2d 521 523-24 (5th Cir 1987) Federal Land BankAssoc of Tyler v Sloane 825 SW2d 439 442 (Tex1992) Rosenthal v Blum 529 SW2d 102 105 (TexCiv App--Waco 1974 writ refd nre)

Sloane 825 SW2d at 442 Rosenthal 52985

SW2d at 105 The Restatement reads One who in the course of his businessprofession or employment or in any othertransaction in which he has a pecuniaryinterest supplies false information for theguidance of others in their businesstransactions is subject to liability forpecuniary loss caused to them by therejustifiable reliance upon the information ifhe fails to exercise reasonable care orcompetence in obtaining or communicatingthe information

RESTATEMENT (SECOND) OF TORTS sect 552(1)(1977) sect 552(1) (1977) see also Nunn v Chemical Waste


Claims have been raised for negligent87

misrepresentations in real estate transactions See egStewart Title Guaranty Co v Sterling 822 SW2d 1(Tex 1992) (buyers claim against seller settled)Steubner Realty 19 Ltd v Cravens Rd 88 Ltd 817SW2d 160 (Tex App--Houston [14th Dist] 1991 nowrit)


SW2d at 105 RESTATEMENT (SECOND) OF TORTS


claim could logically follow from a sellers negligent Burgess Marketing Inc the court specificallyfailure to disclose information leading the buyer to adopted the rule that an accountant may usereasonably draw false inferences about the physical contributory negligence as a defense only where itcondition of the property has contributed to the accountants failure to89

(b) Defenses to Negligent Misrepresentation Consequently a seller found to have negligentlyThough it is not entirely clear whether misrepresented a material fact may be able to at

contributory negligence applies to this tort in Texas least reduce damages by bringing a contributorythere is evidence that several courts of appeals negligence defensewould consider such a defense For example inFederal Land Associates of Tyler v Sloane the (c) Remedies for Negligent Misrepresentation90

appellate court in Tyler stated that contributory Texas courts consider negligentnegligence was a defense for negligent misrepresentation as a species of remedial fraudmisrepresentation But the jury found no Nevertheless the supreme court has opted to deny91

contributory negligence so this assertion was benefit of the bargain damages and mentalmerely dicta In Blue Bell Inc v Peat Marwick anguish damages for this tort choosing instead toMitchell amp Co the Dallas Court of Appeals gave rely on the Restatement (Second) of Torts section92

a stronger indication that it was open to a claim for 552B The Restatement limits damages tocontributory negligence The court reversed a pecuniary losses suffered in reliance upon thesummary judgment for failure of the plaintiff to negligent misrepresentation The court considerednegate a fact issue as to whether reliance wasjustified and therefore whether plaintiff wascontributorily negligent Under this reasoning if93

a plaintiff unreasonably relies on amisrepresentation the damage recovery may bereduced Finally in Greenstein Logan amp Co v

94

perform the contract and to report the truth95

96

97

98

Management Inc No 82-1845 (D Kan Mar 1 1985)Gauerke 332 NW2d at 808-09 One commentatorconcludes that [i]n the context of hazardous substanceliabilities the potential for such unintendedmisrepresentation is great and may extend a sellersliability far beyond the boundaries of his duty to discloseMACHLIN amp YOUNG supra note 31 sect 903[3] (1990)see also Doran v Milland Dev Co 323 P2d 792 (CalApp 1958) (finding actionable misrepresentation whereseller stated based on the citys inspection that thehouse is properly constructed where the seller failed tomake any attempt to confirm that the house was built incompliance with code before making the statement)


SW2d at 105

793 SW2d 692 (Tex App--Tyler 1990) affd90

in part revd on other grounds 825 SW2d 439 (Tex1991)

Id at 696 n491

715 SW2d 408 (Tex App--Dallas 1986 writ92

refd nre)

Id at 415 recoverable for a negligent93

744 SW2d 170 (Tex App--Waco 1987 writ94

denied)

Id at 19095

Rosenthal 529 SW2d at 10496

Sloane 825 SW2d at 442-43 The court97

adopted the damages limits delineated in the Restatementsect 552B after observing that it saw no trend to reject thepecuniary loss rule for what was essentially acommercial tort and that while several other state courtshave allowed mental anguish damages for this tort manyothers states limited damages to those in sect 552B IdJustice Mauzy disagreed with this artificial distinctionbetween remedial fraud actions and actions for fraudulentmisrepresentation Id at 443-44 (Mauzy J concurringand dissenting)

The Restatement provides for negligent98

misrepresentation damages as follows(1) The damages recoverable for a negligentmisrepresentation are those necessary tocompensate the plaintiff for the pecuniaryloss to him of which the misrepresentationis legal cause including (a) the differencebetween the value of what he has receivedin the transaction and its purchase price orother value given for it and (b) pecuniaryloss suffered otherwise as a consequence ofthe plaintiffs reliance upon themisrepresentation (2) The damages


negligent misrepresentation to be essentially a flooded In the more recent Texas Supreme Courtcommercial tort and therefore the damage limits case of Cameron v Terrell amp Garrett Incto be reasonable however a buyer was held to have consumer

3 Statutory Torts(a) Deceptive Trade Practices Act The Act is broad in scope because it permits

In creating the Deceptive Trade Practices Act several independent grounds for recovery It(DTPA or the Act) the Texas Legislature saw fit to accomplishes this objective by providing either aprovide consumers with a cause of action for cause of action under a general prohibition againstdeceptive trade practices without the burden of false or misleading acts for violation of any one ofproof and numerous defenses encountered in a a laundry list of specific violations or for breachcommon law fraud or breach of warranty suit of warranty or unconscionable action or course of99

The legislature specifically added real estate to the action as it is defined by the Act Further thedefinition of goods covered by the Act in 1975 DTPA eliminates the element of reliance by the100

but relief is available only to consumers as injured party as an element of recoveryspecifically defined in the Act The DTPA101

defines a consumer as an individual partnership (1) Elements of a DTPA Causes of Actionor corporation who seeks or acquires by purchase or In sect 1746(b) of the DTPA the laundry listlease any goods or services In Delaney Realty enumerates several specific false misleading or102

Inc v Ozuna the court of appeals held that deceptive acts that may be particularly applicable103

home-buyers who did not pay for or seek to representations or nondisclosures concerningcompensation for services rendered were not environmental problems present on real propertyconsumers under the DTPA with respect to a real Subsection (5) for example prohibits one fromestate agent and could not recover for failure to representing that goods or services havedisclose that the house was subject to being sponsorship approval characteristics ingredients

104

105

standing under the DTPA in a suit against hissellers real estate agent or broker106

107

108

109

110

uses benefits or quantities which they do not have Similarly subsection (7) forbids111

representing that goods or services are of amisrepresentation do not include the benefitof the plaintiffs contract with the defendant

RESTATEMENT (SECOND) OF TORTS sect 552B(1977)

Smith v Baldwin 611 SW2d 611 616 (Tex99

1981) see Joseph v PPG Industries Inc 674 SW2d862 865 (Tex App--Austin 1984 writ refd nre)(stating that common-law defenses are not applicable inDTPA actions) Schenck v Ebby Halliday Real EstateInc 803 SW2d 361 367 (Tex App--Fort Worth 1990no writ) (holding that comparative fault is not applicablefor fraud or DTPA claims) The statute generallyprohibits [f]alse misleading acts or practices in theconduct of any transaction TEX BUS amp COM CODE

ANN sect 1746(a) (Vernon 1987 amp Supp 2000)

Porter v Irvine 658 SW2d 711 714 (Tex100

App--Houston [1st] 1983 no writ)

TEX BUS amp COM CODE ANN sect 1745(4)101

(Vernon 1987 amp Supp 2000) been relied on Id at 602 (Gonzales J dissenting)

Id102

593 SW2d 797 (Tex Civ App--El Paso 1980103

writ refd nre) Id sect 1746(b)(5)

Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106

TEX BUS amp COM CODE ANN sectsect 1741-826107

(Vernon 1987 amp Supp 2000)

Id sect 1750108

Weitzel v Barnes 691 SW2d 598 600 602109

(Tex 1985) [W]e conclude that oral representationsare not only admissible but can serve as the basis of thecomplaint Id at 600 The representation was madeafter the formation of the contract and could not have

TEX BUS amp COM CODE ANN sect 1746(b)110


111


particular standard quality or grade No disclosed If a seller is aware of the presence of112

showing of intent is required for recovery under a hazardous substances before a transaction butsubsection (7) unlike other subsections requiring fails to disclose the information in a effort to inducescienter Consequently a seller might be held the buyer to enter the contract the seller may be113

liable under this subsection for passively failing to held liable if the buyer would not have entered thedisclose information concerning the true quality of contract but for the lack of information The dutythe property being sold to speak under this subsection is considered broader

Subsection (13) makes unlawful knowingly than the common law duty to disclose because theremaking false or misleading statements of fact is no requirement in the DTPA for the buyer toconcerning the need for parts replacement or repair make any reasonable efforts to inspect Theservice Subsection (19) further makes it Texas Supreme Court has noted that [t]he law is114

unlawful to give a warranty which involves rights or not made for the protection of experts but for theremedies that the warranty does not in fact public--that vast multitude which includes thecontain This subsection would apply for ignorant the unthinking and credulous who in115

example if during negotiations a seller represents making purchases do not stop to analyze but arethat the buyer is indemnified against environmental governed by appearances and general inspectionliabilities when he is not Subsection (21) Another advantage for the buyer under the116

prohibits one from representing that work or DTPA over common-law theories is that privity isservices have been performed on or parts replaced not required In fact any party who sought toin goods when the work or services were not enjoy the benefits of a transaction or becameperformed or the parts replaced inextricably intertwined with the transaction is a117

One of the more directly applicable provision proper defendant For example a buyer has beenof the DTPA to the subject of this paper is held to have consumer standing under the DTPA insubsection (23) This subsection creates rights in a suit against his sellers real estate agent or118

a buyer for a sellers failure to disclose information broker In Century 21 Page One Realty vconcerning goods or services which was known atthe time of the transaction if such failure to disclosesuch information was intended to induce theconsumer into a transaction into which the consumerwould not have entered had the information been

119

120

121

122

123

124

125

Id sect 1746(b)(7)112

Smith v Baldwin 611 SW2d at 616113

TEX BUS amp COM CODE ANN sect 1746(b)(13)114


Id sect 1746(b)(19) This subsection effectively115

usurps the merger doctrine and parol evidence ruleDavid J Schenck Remedies for Environmental LiabilityRights of the Toxic Grantee 43 BAYLOR L REV 761(1991) (see IIB5)

Schenck supra note 115 at IIB5116


(Vernon 1987 amp Supp 2000) Note that this sectiondoes not include a requirement that the statement beknowingly false Id

Id sect 1746(b)(23) constructed on the property)118

Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120

(Tex App-- Corpus Christi 1983 writ refrsquod nre)(citing Robinson v Preston Chrysler-Plymouth Inc 633SW2d 500502 n1 (Tex 1982) and Spradling vWilliams 566 SW2d 561 564 (Tex 1978)) (requiringknowledge as a necessary element for a cause of actionunder this section)

See National Resort 585 SW2d at 655121

Spradling 566 SW2d at 563 (quoting Florence122

Mfg Co v J C Dowd amp Co 178 F 73 75 (2d Cir1910))

Flenniken v Longview Bank amp Trust Co 661123

SW2d 705 707 (Tex 1983)

Knight v International Harvester Credit Corp124

627 SW2d 382 389 (Tex 1982)

See eg Cameron 618 SW2d at 541 ECC125

Parkway Joint Venture v Baldwin 765 SW2d 504510-11 (Tex App--Dallas 1989 writ denied) (allowingaction against vendor and broker for failure to disclosedeed restrictions limiting height of any building


Naghad the court of appeals held a vendor and of fraud One lone affirmative defense has126

the real estate agent jointly and severally liable for succeeded to avoid a misrepresentation claim in thea purchasers damages where both knew of the sale of property In Dubow v Dragon adefective condition of a house prior to purchase but purchaser made a thorough inspection of thefailed to disclose this fact to the buyer Also the property and obtained professional opinions before127

court in Gibbs v Main Bank of Houston held a making a decision to purchase The court held that128

title insurance company liable to the buyer for the buyers careful investigation foreclosed thenondisclosure of a recorded lien under the DTPA DTPA action by serving as a new and independent129

Finally in Loma Vista Development Co v basis for the purchase of the property thusJohnson the Texas Supreme Court held a seller intervening and superseding any misrepresentations130

liable for the misrepresentations of his broker or failures to disclose on the part of the vendorstating that a seller is not allowed to retain the No doubt this is not a good defense on which afruits of the fraud of his agent on the ground that seller would like to be forced to relyhe didnt know of or authorize the making of thefraudulent misrepresentation Consequently a (3) Remedies for a DTPA Cause of Action131

seller need not only worry about inadvertently One particular advantage to an injured partymaking false misrepresentations himself but must claiming a DTPA violation is the increased potentialalso be sure the sellerrsquos broker or other agents for recovery of damages Not only is the burden ofrefrain from doing so as well proof less than that required for common-law

(2) Defenses to a DTPA Cause of Action also recover attorneys fees and in some casesVery few defenses apply to the DTPA As treble damages Also at the plaintiffs option

mentioned above common-law defenses are damages may be measured by either the out ofgenerally inapplicable The Texas Supreme Court pocket or benefit of the bargain methodhas also held that imputed or constructive notice discussed above No doubt the DTPA has manyunder recording statutes are not intended to bar advantages to consumers injured byclaims based on fraud or the DTPA This holding misrepresentations by a seller or its agents132

is based on the notion that deed records are notcompiled for the purpose of protecting perpetrators (b) Fraud in Real Estate and Stock Transactions

133

134

135

misrepresentations but a successful plaintiff can136

137

138

ActIn 1967 the Texas legislature created a

specific statutory cause of action for buyers torecover from harm caused in fraudulent real estate

760 SW2d 305 (Tex App--Texarkana 1988126

no writ)

Id at 310-11 Joint and several liability was127

based on the Fraud in Real Estate and Stock TransactionsAct Id TEX BUS amp COM CODE ANNsect 2701(b)(Vernon 1987)

666 SW2d 554 (Tex App--Houston [1st128

Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130

Id at 924-25 TEX BUS amp COM CODE ANN sect 1750(d)131

Houston Title Co v Ojeda de Toca 748132

SW2d 449 (Tex 1988) ECC Parkway 765 SW2d at Id sect 1750(b)(1)509 But cf NRC Inc v Pickhardt 677 SW2d 292(Tex App--Texarkana 1984 writ refd nre) (holding Kish v Van Note 692 SW2d 463 (Tex 1985)that constructive notice may initiate the limitations period Leyendecker amp Assoc Inc v Wechter 683 SW2d 369on a fraud claim) (Tex 1984)

ECC Parkway 765 SW2d at 509133

746 SW2d 857 (Tex App--Dallas 1988 no134

writ)

Id at 860 Similarly a claim that the buyer135

already had actual knowledge of the conditions of theproperty for other reasons might successfully frustrate abuyers claim under the DTPA

136


137

138


transactions This provision is available to a silence can be found to be as misleading as a139

broader scope of injured parties than the DTPA positive misrepresentation passive or evenbecause it applies to those who fail to qualify as seemingly innocent nondisclosure might conceivablyconsumers under the DTPA Furthermore Texas subject a seller to liability under this statutecourts have found that a buyer of real property hasdiscretion to sue for fraud either under the Fraud in (2) Defenses to a Fraud in Real Estate Cause ofReal Estate and Stock Transactions Act at Action140

common law or both In applying the Fraud in Real Estate Act the141

(1) Elements of a Fraud in Real Estate Cause of were made by a person responsible for knowing theAction truth or falsity of the representations the falseUnder the statute fraud in a real estate representations may still support an action in fraud

transaction consists of a false representation of a even if the person made them without knowledge ofpast or existing material fact made to induce a their falsity Further Texas courts seem to agreeperson to enter a contract and relied on by that that failure to investigate will not defeat an action inperson in entering the contract Note the lack of fraud They hold that a defrauded party is entitled142

a requirement for knowledge that the representation to rely on the fraudulent partys affirmativewas false when made This is yet another example representations One court put it this way Whenof potential liability for perfectly innocent one has been induced to enter into a contract bystatements that turn out to be false Also where fraudulent representations the person committing143

courts have held that where material representations

144

145

146

147

the fraud cannot defeat a claim for damages basedupon a plea that the party defrauded might havediscovered the truth by the exercise of propercare 148

As with common law fraud it is less clearwhether a buyers duty to investigate might besuccessfully used as a defense to liability where theseller is guilty only of nondisclosure It may againdepend on the degree of observability of the defectand therefore the level of sophistication of thebuyer

(3) Remedies for a Fraud in Real Estate Cause ofActionIf a person makes a false representation with

actual awareness of the falsity of the statement suchperson may be held liable under the statute for

TEX BUS amp COM CODE ANN sect 2701 (Vernon139

1987) (Act of 1967 60th Leg RS ch 785 sect 1 1967Tex Gen Laws 2343 amended by Act of 1983 68thLeg RS ch 949 sectsect 1-2)

Id140

See eg Wright 579 SW2d at 578 El Paso141

Dev Co v Ravel 339 SW2d 360 365 (Tex CivApp--El Paso 1960 writ refd nre) To bring a claimunder sect 2701 it has been held that the misrepresentationof material fact must have induce the another to enter intoa contract for the sale of land or stock Nolan 577SW2d at 555-56

TEX BUS amp COM CODE ANN sect 2701(a)142

(Vernon 1987) The language of the statute readsFraud in a transaction involving real estateor stock in a corporation or joint stockcompany consists of a (1) false representation of a past or

existing material fact when the falserepresentation is

(A) made to a person for the purpose ofinducing that person to enter into acontract and

(B) relied on by that person in entering Idinto that contract

Id

Id sect 2701(b) A person who violates this act143

may be held liable to the injured party for attorneys feesand costs Id sect 2701(e) 811 (Tex 1888)

Kerrville HRH Inc v City of Kerrville 803144

SW2d 377 384 (Tex App--San Antonio 1990 writdenied)

Id Wright 579 SW2d at 579 Polk Terrace145

386 SW2d at 593

146

Id147

Kerrville HRH 803 SW2d at 385-86 ee also148

Koral 802 SW2d at 651 Labbe v Corbett 6 SW 808


exemplary damages Also a person who (1) has conclusions about the propertys conditions or149

actual awareness of the falsity of a representation providing any interpretation of ambiguousmade by another person (2) fails to disclose the information about possible contamination previousfalsity of the representation to the person defrauded uses and neighboring property (4) recommend theand (3) benefits from the false representation buyer retain legal or technical assistance inviolates the Act and is liable to the person defrauded interpreting information Also the seller shouldfor exemplary damages The statute allows that make sure his broker or other agents or150

[a]ctual awareness may be inferred where objective representatives observe the same guidelinesmanifestations indicate that a person acted withactual awareness151

It is interesting to note that the 1983amendment to this statute both lowered the burdenof proof necessary to recover exemplary damagesand eliminated the limitation on exemplarydamages Before the 1983 amendments to152

recover punitive damages the plaintiff had to showthat the defendant willfully made the falserepresentation Now the plaintiff must only showactual awareness of the falsity of the statement153

Also the 1983 legislature deleted the limit onpunitive damages which were not to exceed twicethe amount of the actual damages Finally the154

legislature added the simplified means of showingactual awareness So this revised statute makes it155

simpler for a plaintiff to recover for fraud in realestate transactions than under prior law or currentcommon-law rules

To avoid any of the different forms ofmisrepresentation liabilities several precautionsmay be taken by sellers The following156

precautionary measures have been suggested(1) communicate the scope of any representationsconcerning the property (2) expressly mention thesource of the representations (3) avoid offering any

157

D CONTRACT RISK FROM NONDISCLOSURE

Absent a contrary contract provision the riskof losses from environmental contamination that isnot attributable to the fault of either the buyer orseller generally shifts from the seller to the buyer atthe transfer of either title or of possession Of158

course the parties are free to allocate environmentalliabilities differently by including appropriateprovisions in their transfer agreements In theprocess of negotiating which party will bear certainrisks the parties may create or eliminate certaindisclosure duties For example a buyer maydemand certain disclosures from the seller about thequality of the property that the seller would nototherwise have a duty to disclose Conversely someseller disclosure duties may be eliminated by anagreement by the buyer to acquire the property onan as is basis which is discussed in more detailbelow In addition certain contractual provisionsmay make certain defenses to liability unavailableFor example in one Texas case a contract betweena buyer and a seller provided that the seller wouldensure that the air-conditioning equipment wouldoperate to standards required by the lessee of thebuilding on the property In the buyers suit againstthe seller for breach of that contract provision thecourt held that the defense of caveat emptor wasunavailable because the buyer reasonably reliedupon his contract rather than his owninvestigation This sort of rationale might159

reasonably extend to environmental liabilityprovisions as well

Contract provisions intended to shift liabilitiesbetween buyers and sellers have routinely been

TEX BUS amp COM CODE ANN sect 2701(c)149

(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151

Act of 1983 68th Leg RS ch 949 sectsect 1-2152

1983 Tex Gen Laws 5208


(Vernon 1987)

Id154

Id155

MACHLIN amp YOUNG supra note 31 sect 903[3] refd nre)156

Id157


sect 903[4][a]

Permian Building Inc v Greenblatt 442159

SW2d 831 835 (Tex Civ App--Fort Worth 1969 writ


upheld where the intent to allocate those risks was parties reduce their contract to writing the writtenclear The general law of contracts governs in instrument will be presumed to embody their entire160

these instances It allows parties bargaining at agreement Unless the parties agree to expressly161

arms length to protect themselves by allocating extend contractual representations and warrantiesrisks to the party best able to bear them beyond the closing of the sale express warranties162

The intent to allocate need not necessarily be must also appear within the four corners of the deedwritten in the contract For example in Greenwood effecting the conveyance in order to be effectiveMills Inc v Russell Corp Russell put down a This follows from the application of the mergerdeposit for the purchase of a production facility doctrine which provides that the sales contract isRussell later sued Greenwood to get its deposit merged into the deed on delivery and provisionsmoney back claiming that Greenwood fraudulently contained in the sales contract are therebyor negligently failed to disclose the plants ineffective if not repeated in the deed itself Theenvironmental problems The court was merger doctrine has been held inapplicableunsympathetic to Russells claim It held that however where the granting of the deed is only partRussell got exactly what it bargained for here an performance of earlier agreement in which fraudoption contract The court reminded the misrepresentation accident or mistake caused the163

complaining party of the purpose of placing the omission deposit Placing the deposit allowed Russell to Buyers of real property frequently seek aconduct a thorough environmental investigation and laundry list of environmental representations andavoid the losses it might well have sustained if it warranties These representations and warrantieshad prematurely entered into a purchase can be problematic to sellers if not fully accurateagreement The court also found that when made because both contract and tort claims164

Greenwood was under no duty to disclose because can arise as a result of any breach thereof Inthe full extent of the plants environmental problems reviewing these provisions practitioners arecould have been easily determined from a review of cautioned to consider the breadth of the statementsrecords165

The parties to an agreement to transfer realproperty may also contractually create some tortliability For example if the seller expresslywarrants that the property is of a certain quality thatit is not the seller may be held liable for not only abreach of contract but also some form ofmisrepresentation or fraud

1 Express WarrantiesWarranties tied to an agreement between

parties may be either express or implied If the

166

167

168

169

170

Greenwood Mills 981 F2d 148 Southland160

Corp v Ashland Oil Inc 19 ENVTL L REP (ENVTL LINST) 20738 (DNJ 1988) Mardan Corp v CGCMusic Ltd 804 F2d 1454 (9th Cir 1986)

Greenwood 981 F2d at 151161

Id162

Id at 150163

Id164

Id at 151 El Paso 1918 no writ)165

Danciger Oil amp Refining Co of Texas v166

Powell 154 SW2d 632 (Tex 1941) Palm v MortgageInv Co of El Paso 229 SW2d 869 873 (Tex CivApp--El Paso 1950 writ refd nre) Note thatCERCLA does not abrogate the parties contractual rightsconcerning express warranties Chemical WasteManagement Inc v Armstrong World Indus Inc 669F Supp 1285 (ED Pa 1987)

Humber v Morton 426 SW2d 554 556 (Tex167

1968) Scull v Davis 434 SW2d 391 393 (Tex CivApp--El Paso 1968 writ refd nre) Gill v Baird 32SW2d 941 (Tex Civ App--Beaumont) affd sub nom77 SW2d 201 (Tex 1934)

See generally JOHN CRIBBET amp CORWIN168

JOHNSON CASES AND MATERIALS ON PROPERTY 1454-56(5th ed 1984)

See Sanchez v Dickinson 551 SW2d 481169

(Tex Civ App--San Antonio 1977 no writ) PleasantGrove Builders Inc v Phillips 355 SW2d 818 (TexCiv App--Dallas 1962 writ refd nre)

See Middleton v Brawley 12 SW2d 257 (Tex170

Civ App--Amarillo 1928 no writ) Crawford v El PasoLand Improvement Co 201 SW 233 (Tex Civ App--


and sellers will want to narrow the statements as only disclaimers of warranties that bar only actionsmuch a possible Sellers may narrow based on breach of warranty representations by adding qualifiers such as to the In Texas an as-is clause contained in abest of sellers actual knowledge or limiting purchase and sale agreement may preclude a buyerknowledge to that of a particular person or group of of real property from claiming damages against thepersons Perhaps a buyer wants a specific seller as a result of the sellers non-disclosure ofrepresentation that there has been no on-site environmental conditions on the property beingdisposal of petroleum or other pollutants Since this purchased For example in Prudential Insurancerepresentation could conceivably be broad enough to Company of America v Jefferson Associates Ltdinclude leakage of oil from vehicles on the property the buyer of a commercial building purchased on anthe seller may want to add a qualification that the as-is basis and without any express or impliedrepresentation extends only to those substances the warranties The conveyance was made after thepresence of which poses a threat to human health seller had confirmed to the buyer that the buildingwelfare or the environment As another example in had no problems or defects other than a foundationNunn v Chemical Waste Management Inc the problem and after the buyer had inspected thecourt held that seller breached its warranty that the building Soon after its purchase the buyerfacility complied with all laws when leakage in discovered asbestos throughout the building ofviolation of state law was discovered which the seller was unaware at the time of the171

2 As Is Clauses to the Rescue - PerhapsTexas courts have long upheld the sale of

property on an as is basis By an as is clause172

the seller makes no warranties and provides noindemnities to the buyer Several other173

jurisdictions find these clauses ineffective howeverin releasing a seller from liability to the buyer forenvironmental conditions affecting property Insome cases to be effective for hazardous conditionscourts have required that the as is clausespecifically mention the pertinent environmentalcondition Other courts treat as is clauses as174

175

purchase The buyer sued the seller for damages onseveral theories including a claim that the sellerfraudulently misrepresented the environmentalcondition of the building The Supreme Court ofTexas in reversing the appellate courts decisionheld among other things that the as is clause atissue in this particular case was valid and thusprevented the buyer from asserting that the sellersnon-disclosure of the asbestos in the building wasthe cause in fact of the buyers injury The court176

explained that a valid as is clause negatescausation and thus prevents the buyer from holdingthe seller liable if the property being purchased isfound to be worth less than the price paid

In its analysis of the case the Court identifiedseveral factors it considered in determining that theparticular as is clause was valid First the177

language of the ldquoas isrdquo provision clearly expressedthat the buyer was purchasing the property on an asis basis and contained an affirmation that the buyer

856 F2d 1464 1470 (10th Cir 1988)171

See eg Prudential Ins Co of America v172

Jefferson Assoc Ltd 896 SW2d 156 (Tex 1995) MidContinent Aircraft Corp v Curry County Spraying ServInc 572 SW2d 308 (Tex 1978) Singleton v LaCoure712 SW2d 757 (Tex App--Houston [14th Dist] 1986writ refd nre) Henderson v Ford Motor Co 547SW2d 663 (Tex Civ App--Amarillo 1977 no writ)

An indemnity clause may trump an as is clause173

so that a buyer can pursue its claim against a seller forcleanup costs Southland Corp 19 ENVTL L REP(ENVTL L INST) 20738

Amland Properties Corp v Aluminum Co of174

America 711 F Supp 784 802 (DNJ 1989) (holdingas is clause ineffective to avoid liability for abnormallydangerous product) Garb-Ko Inc v Lansing-LewisServs Inc 423 NW2d 355 358 (Mich Ct App1988) (refusing to shift the risk of loss under an as is Id at 161-62

clause to a buyer for an unknown and undisclosed leakingstorage tank)

Mardan Corp v CGC Music Ltd 600 F175

Supp 1049 1055 (D Ariz 1984) affd on othergrounds 804 F2d 1454 (9th Cir 1986) Wiegmann ampRose Intl Corp v NL Indus 735 F Supp 957 (NDCal 1990) International Clinical Labs Inc v Stevens710 F Supp 466 469 (EDNY 1989)

Prudential 896 SW2d at 161176

177


was not relying on any representations by the seller fraudulent nondisclosure by the seller InThe buyer was instead relying upon its own determining whether the plaintiff had a right to relyexamination of the property The ldquoas isrdquo clause also on the defendantrsquos representations as to thestated that the buyer was taking the property ldquowith feasibility of a particular diamond mining projectany and all latent and patent defectsrdquo and without the Court in Schlumberger Technologyexpress or implied warranties including any Corporation v Swanson held that if a contractwarranty that the property was fit for a particular contains ldquoa release that clearly expresses the partiesrsquopurpose The nature of the transaction and the intent to waive fraudulent inducement claims or onetotality of the circumstances further indicated that that disclaims reliance on representations abouttheas is clause was part of an arms-length specific matters in disputerdquo such a release maytransaction between sophisticated parties and was preclude a claim of fraudulent inducement oran important basis of the bargain rather than a fraudulent nondisclosure if the nature of theboiler-plate provision in a standard form contract transaction and the totality of the circumstances isFinally the seller had not fraudulently induced the such that the express release is valid Thus if anbuyer into making the ldquoas isrdquo agreement ldquoas isrdquo clause contains language to establish that the

If a seller induces a buyer to purchase property parties intended to waive fraudulent inducementon an as is basis by fraudulent representation or claims and meets all of the other essentialconcealment of information the ldquoas isrdquo clause may requirements the ldquoas isrdquo clause may be upheldbe found invalid In such an instance the seller notwithstanding the fact that the buyer was178

cannot assure the buyer of the condition of the fraudulently induced by the seller into entering intoproperty and then disavow the assurance which the ldquoas isrdquo agreement procured the lsquoas isrsquo agreement As discussed There remains some doubt that an as is179

above Texas law requires a seller of real estate to clause may be used to absolve a seller of CERCLAdisclose any and all known material facts about the liability or similar Texas cleanup liability but itreal estate which a buyer would not discover in the may be used to create a source of funds to pay suchexercise of ordinary care and due diligence costs In International Clinical Laboratories Inc180

Consistent with this precedent the Prudential court v Stevens the district court held that while an as isimplied that if the seller had known of the asbestos clause could prevent a purchaser from recovering onin the building it would have had a duty to disclose a breach of warranty theory it would not necessarilythis information to the buyer notwithstanding the follow that a CERCLA claim would be similarlyldquoas isrdquo clause contained in the purchase and sale barred But in AM International Inc vagreement An as is clause may also be International Forging Equipment the Sixth Circuitineffective if the buyer is entitled to inspect the adopted the theory of the Ninth Circuit thatcondition of the property being sold but such CERCLA sect 107(e)(1) allowed for the contractualentitlement is somehow impaired by the seller allocation of liabilities among responsible parties

Although fraudulent inducement by the seller Further an as is clause may not absolve a seller ofmay invalidate the effect of an ldquoas isrdquo clause if the any liabilities to the government or protect a sellerldquoas isrdquo clause or another clause within the purchaseand sale agreement contains a statement that thebuyer unequivocally disclaims reliance upon thesellerrsquos representations and clearly expresses thepartiesrsquo intent to waive fraudulent inducementclaims the ldquoas isrdquo clause may be upheldnotwithstanding a fraudulent inducement or

181

182

183

Id Pairett v Gutierrez 969 SW2d 512 516178

(Tex App--Austin 1998 writ denied)


National Resort 585 SW2d at 657-58180

Pairett 969 SW2d at 515 Mardan 804 F2d at 1460)

959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182

also Southfund Partners III v Sears Roebuck and Co57 F Supp 2d 1369 1375 (ND Ga 1999) (finding thatan ldquoas isrdquo clause contained in a purchase and salecontract does not relieve the seller of the property fromCERCLA liability unless the ldquoas isrdquo clause clearlyexpresses the purchaserrsquos intent to release the seller fromany CERCLA liability)

982 F2d 989 994 (6th Cir 1993) (citing183


from CERCLA-based claims In any event if the be able to contract away liability for his own184

present owner is financially unable to perform a negligent nondisclosure of material informationcleanup or pay for a government-ordered cleanupthe government will look to those parties who were (b) CERCLA Liability Indemnificationowners at the time of disposal CERCLA specifically provides185

3 Indemnification(a) Construction of Clauses

Texas courts usually construe indemnitiesstrictly against the party seeking recovery The186

courts generally conclude that exculpatory orindemnity clauses that attempt to free an actor fromliability for his own negligence are basically validbut must be strictly construed To enforce such187

clauses the courts require express and specificlanguage such as including such partysnegligence There is a growing trend away from188

strict construction however especially if theagreement is between sophisticated commercialparties Thus if written carefully the seller may189

No indemnification hold harmless orsimilar agreement or conveyance shall beeffective to transfer from the owner oroperator of any vessel or facility or fromany person who may be liable for arelease or threat of release under thissection to any other person the liabilityimposed under this section Nothing inthis subsection shall bar any agreement toinsure hold harmless or indemnify aparty to such agreement for any liabilityunder this Section190

In this jurisdiction parties can allocateCERCLA liabilities amongst themselves but suchagreements will not bind the federal government orothers not party to the agreement who may stillpursue their CERCLA claims against theindemnified party For the contractual indemnity191

to be held to allocate CERCLA liability theagreement must clearly and unequivocally express

42 USC sect 9601(35)(c) (1997) International184

Clinical Labs 710 F Supp at 469 (While the as isclause prevents a purchaser from recovering on a breachof warranty theory it does not necessarily follow that aclaim based upon CERCLA is similarly barred) But seeAM Intl 982 F2d at 994 (adopting the theory of theNinth Circuit that CERCLA sect 107(e)(1) allows for thecontractual allocation of liabilities among responsibleparties)

42 USC sect 9607(a)(2) (1997)185

Hudson v Hinton 435 SW2d 211 214 (Tex186

Civ App--Dallas 1968 no writ) Rublee v Stevenson161 SW2d 528 530 (Tex Civ App--Dallas 1942 nowrit)

K amp S Oil Well Serv Inc v Cabot Corp 491187

SW2d 733 739 (Tex Civ App--Corpus Christi 1973writ refd nre)

B-F-W Constr Co v Garza 748 SW2d 611188

613 (Tex App--Fort Worth 1988 no writ) Adams vSpring Valley Constr Co 728 SW2d 412 414 (TexApp--Dallas 1987 writ refd nre)

Penny L Parker amp John Slavich Contractual189

Efforts to Allocate the Risk of Environmental LiabilityIs There a Way to Make Indemnities Worth More thanthe Paper they are Written On 44 SW LJ 1349 1352 parties contractual rights)

n11 (1991) Gulf Oil Corp v Burlington Northern RRInc 751 F2d 746 749 (5th Cir 1985) Ohio Oil Co vSmith 365 SW2d 621 627 (Tex 1963) AerospatialeHelicopter Corp v Universal Health Servs Inc 778SW2d 492 502 (Tex App--Dallas 1989 writ denied)

42 USC sect 9607(e)(1) (1997)190

Joslyn Mfg Co v Koppers Co Inc 40 F3d191

750 754-55 (5 Cir 1994) (holding that a tenantrsquosth

indemnity agreement to cover CERCLA liability) UnitedStates v Lowe 29 F3d 1005 1009 (5 Cir 1994)th

(holding indemnity provision in corporate bylaws toprovide a source of funds to officers for CERCLAliability) see also Mardan 804 F Supp at 1456 (releaseheld to cover CERCLA liability) Hays v Mobil OilCorp 736 F Supp 387 393 (D Mass 1990) affd inpart vacated in part 930 F2d 96 (1st Cir 1991)(prohibiting the indemnified party from shielding itselffrom the government through an indemnity butindemnification clauses are still permitted to allocate theburdens of risks and costs among otherwise liableparties) Chemical Waste Management 669 F Supp at1285 (CERCLAs liability provisions do not abrogate the


an intent to cover such liability Thus there is at transfer of land the grantee receives the grantors192

least some opportunity to contractually allocate CERCLA liability if any along with the fee simpleCERCLA liability between buyers and sellers in a title sales transaction Indemnity contracts underCERCLA are interpreted in accordance with thestatersquos rules governing construction of contracts todetermine the mutual intent of the parties193

E CERCLA LIABILITY AND NONDISCLOSURE

1 CERCLA LiabilityAs mention above CERCLA was enacted to

promote the cleanup of sites contaminated withhazardous chemicals CERCLA fixes liability forsuch response costs on those parties connected withthe contaminated property or the activities creatingthe contamination The Potentially Responsible194

Parties (PRPs) may include both past and currentowners of the contaminated land as well as otherparties CERCLA may impose liability on certain195

intervening landowners as well as on seeminglyinnocent landowners who never actually discardedany hazardous waste on the property Liability196

under the statute is not only strict but also joint andseveral between all responsible parties So buyers197

must beware of CERCLA because in almost every

198

2 Disclosure Issues Affecting Liability Allocation(a) Innocent Landowner Defense

The innocent landowner defense was added toCERCLA in 1986 by the Superfund Amendmentand Reauthorization Act (SARA) Under the199

innocent landowner defense a buyer may avoidliability by establishing by a preponderance of theevidence that the release or threatened release of ahazardous substance and the resulting damages werecaused by an act or omission of a third party The200

third party may include the seller of the property byland contract deed or other instrument transferringtitle or possession201

The innocent landowner defense coversinstances where a buyer acquired the property afterthe disposal or placement of the hazardoussubstance on in or at the facility and the buyer202

can establish by a preponderance of the evidencethat at the time the buyer acquired the facility thebuyer did not know and had no reason to know thatany hazardous substance which is the subject of therelease or threatened release was disposed of on inor at the facility To establish that the buyer had203

See Southland Corp 19 ENVTL L REP 20738192

(DNJ 1988) Chemical Waste Management 669 FSupp at 1295 FMC Corp v Northern Pump Co 668 FSupp 1285 1289 (D Minn 1987) appeal dismd 871F2d 1091 (8th Cir 1988) But cf Mardan 804 F2d at1462 Rodenbeck v Marathon Petroleum Co 742 FSupp 1448 (ND Ind 1990)

Lyncott Corp v Chemical Waste Management193

Inc 690 F Supp 1409 1415 (ED Pa 1988) Bainvillev Hess Oil Virgin Islands Corp 837 F2d 128 (3d Cir1988)

42 USC sect 9607(a) (1997)194

Id195

42 USC sect 9607(a) (1997) United States v196

Monsanto Co 858 F2d 160 168-69 (4th Cir 1988)cert denied 490 US 1106 (1989) Shore Realty 759F2d at 1042 United States v Chem-Dyne Corp 572 FSupp 802 806 (SD Ohio 1983) Southfund PartnersIII 57 F Supp 2d at 1376-78

42 USC sect 9607(a) (1997) Monsanto 858197

F2d at 168-69 Shore Realty 759 F2d at 1042 Chem- also be successful if the defendant acquired the facilityDyne 572 F Supp at 806 by inheritance or bequest Id sect 9601(35)(A)(iii)

Schenck supra note 115 at I198

Superfund Amendment amp Reauthorization Act199

of 1986 Pub L No 99-499 100 Stat 1628-30 16921693 1705 1706 (1986) (current version of CERCLAat 42 USC sectsect 9601-9675) (1997) An analogous statelaw provision was enacted by the Texas legislature in1997 to protect innocent owners from liability The statelaw provisions are not discussed in detail in this paperbut may be found in the Texas Health amp Safety CodeChapter 361 Subchapter V

42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202

Id sect 9601(35)(A)(i) A buyer may also203

successfully bring this defense by showing that he is agovernment entity which acquired the facility by escheator through any other involuntary transfer or throughthe exercise of eminent domain authority by purchase orcondemnation Id sect 9601(35)(A)(ii) The claim may


no reason to know of any hazardous substances the (b) Intervening Landownersbuyer must have undertaken at the time of Under the statute a defendant may not claimacquisition all appropriate inquiry into the previous the innocent landowner defense if the defendantownership and uses of the property consistent with obtained actual knowledge of the release orgood commercial or customary practices in an effort threatened release of a hazardous substance at suchto minimize liability In determining whether a facility when the defendant owned the real property204

buyer undertook all appropriate inquiry the court and then subsequently transferred ownership of themust consider any specialized knowledge or property to another person without disclosing suchexperience on the part of the defendant the knowledge This provision appears to getrelationship of the purchase price to the value of the intervening landowners off the hook if they discloseproperty if uncontaminated commonly known or to the buyer But the disclosure makes the innocentreasonably ascertainable information about the landowner defense unavailable to the buyer of theproperty the obviousness of the presence or likely property because the new buyer will have reason topresence of contamination at the property and the know of the presence of hazardous substances onability to detect such contamination by appropriate the property It also seems that if the new buyerinspection A sellerrsquos failure to disclose discovers the contamination on his own the205

information not reasonably discoverable to the intervening owner will still be jointly and severallybuyer is irrelevant to the inquiry liable for his nondisclosure

Again parties involved in commercial Thus far the innocent landowner defense hastransactions are held to a higher standard than those not often been litigated and only a few courts haveengaged in private or residential transactions upheld the defense This may be explained by the206

There is also evidence that Congress intended to impact the statute has had on the behavior of buyersestablish a significant scope of inquiry particularly who now routinely perform thorough investigationsin commercial transactions As a result before they purchase property If as a result of a207

commercial real estate transactions now routinely thorough investigation a buyer finds contaminationinvolve considerations of environmental issues and the defense is unavailable The buyer then mustpurchasers often conduct environmental walk away from the purchase or determine how toassessments to establish the scope of any risks or if allocate the liability risk associated with what wasnone are indicated the buyer may take advantage of found If the buyer uncovers no contaminationthe innocent landowner defense there probably is none and the buyer is unlikely to

Under this scheme commercial buyers are discover it latereffectively subjected to the old rules of caveatemptor If buyers fail to make a proper inquiry theymay be held jointly and severally liable for cleanupcosts along with the seller and any other PRPs Ifthey do perform a proper investigation and findnothing however they are relieved of all CERCLAliability and the seller and other PRPs must bear thefull burden of remediation expenses If the buyerfinds contamination or potential contamination thenhe must decide whether to make the purchase at alland if so how best to contractually relieve himselfof any potential liabilities

208

209

II REPORTING REQUIREMENTS210

Id sect 9601(35)(B)204

Id 205

HR REP NO 962 99th Cong 2d Sess 186-88206

reprinted in 1986 USCCAN 3279 3280-81

Id this paper207

42 USC sect 9601(35)(C) (1997)208

United States v Pacific Fur Depot Inc 716 F209

Supp 1341 (D Idaho 1989) see also United States vSerafini 706 F Supp 346 353 (MD Pa 1988)(upholding the defense as valid in response to thegovernments summary judgment motion but trial wasstill required to determine the effectiveness of thedefense)

The analysis in this paper is limited in scope to210

reporting requirements most often triggered as a result offinding contaminants within the subsurface (soil orgroundwater) of the property that is the subject of a realestate transaction Reporting requirements that might betriggered by operational exceedences or other violationsdiscovered during due diligence or by spills or otherreleases of hazardous materials are beyond the scope of


Discovery of contamination during the process release detection methods might be trigger by aof completing a transactions involving real estate buyerrsquos due diligence in anticipation of a transactioncan and sometimes does trigger statutory obligations involving real property to report environmental conditions to the TNRCCIn many cases reports of newly discoveredcontamination may lead directly down a path toward Section 26039 of the Texas Water Codeobligations to perform further investigation of the governs reporting of historical releases ofenvironmental condition of the property and perhaps contamination that is unrelated to a storage tankremedial activities to correct the environmental system The Commission has historicallycondition Reporting responsibilities typically interpreted this provision to require reporting of all211

burden the owner of the land so savvy property discoveries of historical contamination but thesellers should be sensitive to what a prospective regulated community has generally considered itpurchaserrsquos environmental site assessment might more carefully in light of the particular facts andreveal and how this information will be managed circumstances The basic language of the statuteonce generated Particularly in advance of any says that ldquowhenever an accidental discharge orinvasive sampling a seller may among other things spill occurs from any activity or facility whichwish to clarify reporting obligations with the buyer causes or may cause pollution the individualand its environmental consultant protect the operating in charge of or responsible for theconfidentiality of any data generated by the activity or facility shall notify the commission asinvestigation or attempt to shift the liability risk soon as possible and not later than 24 hours after212

related to the presence of historical contamination the occurrencerdquo Applying this language to an

A REPORTING RELEASES FROM

STORAGE TANK SYSTEMS

The TNRCC has established detailed rules because the discovery of historical contaminationconcerning release reporting and any associated was not in the minds of the drafters at the time thecorrective action that may be applicable to regulated statute was written The language seems betterunderground and above-ground storage tank designed to address a more typical current spillsystems The Commission mandates that both situation Further the definitions included and213

owners and operators of tank systems must report those excluded from the statute seem to leavesuspected or confirmed releases to either its district further questions An ldquoaccidental dischargerdquo isor Austin office within twenty-four (24) hours of defined to mean ldquoan act or omission through whichdiscovery or receipt of written notification from waste or other substances are inadvertentlyothers Discovery may occur either by invasive discharged into water of the staterdquo ldquoWaterrdquo or214

testing physical observation of free product or ldquowater in the staterdquo includes both surface andvapors observation of unusual operating conditions groundwater The definition of ldquolsquoto dischargersquoor monitoring results And of course any of these215

B REPORTING NON-TANK RELEASES

216

217

historical contamination situation is more trickythan it might first appear

The interpretation problems arise perhaps

218

219

See generally 30 TEX ADMIN CODE Ch 327211

334 335 and 350

See Environmental Health and Safety Audit212

Privilege Act TEX REV CIV STAT ANN art 4447cc(Vernon 2000) Confidentiality issues are beyond thescope of this paper

30 TEX ADMIN CODE Ch 334 Subchapter D213

sect 334129

30 TEX ADMIN CODE sect 33472 Id sect 26039(a)(1)214

Id Id sect 26001(5)215

The TNRCC adopted spill response rules that216

govern reporting of new spill during 1996 30 TEXADMIN CODE Ch 327 In the November 17 1995commentary accompanying the second version of theproposed rules the Commission took the opportunity tosay that it was omitting from the rules any directive toreport historical contamination because there alreadyexisted adequate reporting and remediation requirementsfor historical releases 20 Tex Reg 9535 9536 (1995)

TEX WATER CODE ANN sect 26039(b) (Vernon217

Supp 2000)

218

219


includes to deposit conduct drain emit throw run contaminants can be traced to natural sources Ifallow to seep or otherwise release or dispose of or one assumes the contaminants were not from ato allow permit or suffer any of these acts or natural source it would be unclear whether anomissionsrdquo On the other had the definition of ldquoaccidental dischargerdquo had occurred because that220

ldquospillrdquo means ldquoan act or omission through which definition suggests the substances have alreadywaste or other substances are deposited where reached the water (they ldquoare inadvertentlyunless controlled or removed they will drain seep discharged into waterrdquo) Similarly it is not obviousrun or otherwise enter water in the staterdquo that a ldquospillrdquo had occurred because that definition221

ldquoOther substancesrdquo are those ldquowhich will cause requires that the substances ldquowillrdquo(not mightpollutionrdquo if discharged into water ldquoPollutionrdquo someday) enter the water Finally even if one222

means the contamination of water that renders it assumed that the substances will enter the waterharmful or impairs its usefulness given that the groundwater is deep and has no use223

Because the statute requires the discharge or the presence of the contaminants in the water canspill to occur from an activity or facility through cause no ldquopollutionrdquo In the real world there aresome act or omission the discovery of naturally often elements of this extreme example that makeoccurring contaminants would not trigger the notice difficult the analysis of whether a reportingrequirement even if they rendered the water obligation has been triggeredunusable On the other hand if historicalcontamination not likely to be naturally occuring isdiscovered to be present in surface or usable Before a tract of land that is greater that onegroundwater at levels that would clearly be harmful acre in size may be developed soil tests must beor would impair the waterrsquos usefulness then performed to determine whether any part of the tractalthough it would not be obvious when the overlies a closed municipal solid waste landfillldquoaccidental dischargerdquo or ldquospillrdquo occurred the facility (ldquoCMSWLFrdquo) The tests must benotice provision would likely be considered performed in accordance with Commission rulestriggered The more difficult problems in analyzing that may be found in Chapter 330 of the Texasthe notice obligations arise in the more usual Administrative Code Subchapter T A developerinstance which lie somewhere between these two may wish to perform such testing during the dueextremes diligence phase of the real estate transaction in order

Consider a rather extreme example in which to discover whether additional engineering and thecertain contaminants are discovered in the shallow related expense may be needed for the plannedsubsurface soils but not in the groundwater The construction activities The owner or lesseecontaminants could be sourced to activities at the performing the tests must then send the results tofacility but they are also known to be naturally the Commission not later than the thirtieth (30 ) dayoccurring in the area The contaminants tend to before development begins on the land bind to soils making it unclear whether they willmigrate though the soils to the groundwater and ifso whether they would ever reach a concentrationthat would harm anyone or anything Further thegroundwater is deep and of such a quality that it hasno usefulness for any purpose

This example would probably not bereportable To begin it creates some doubt whetherthere was any occurrence at all given that the

C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222

Id sect 26001(13) sect 361538(e) (Vernon Supp 2000)223



30 TEX ADMIN CODE sect 330951-963225



Exhibit A

SELLERS DISCLOSURE NOTICE

CONCERNING THE PROPERTY AT (Street Address and City)

THIS NOTICE IS A DISCLOSURE OF SELLERS KNOWLEDGE OF THE CONDITION OF THE PROPERTY AS OF THE DATESIGNED BY SELLER AND IS NOT A SUBSTITUTE FOR ANY INSPECTIONS OR WARRANTIES THE PURCHASER MAYWISH TO OBTAIN IT IS NOT A WARRANTY OF ANY KIND BY SELLER OR SELLERS AGENTS

Seller _____ is _____ is not occupying the Property

If unoccupied how long since Seller has occupied the Property ___

1 The Property has the items checked below

Write Yes (Y) No (N) or Unknown (U) Range Oven Microwave Dishwasher Trash Compactor Disposal WasherDryer Hookups Window Screens Rain Gutters Security System Fire Detection Equipment Intercom System TV Antenna Cable TV Wiring Satellite Dish Ceiling Fan(s) Attic Fan(s) Exhaust Fan(s) Central AC Central Heating WallWindow Air Conditioning Plumbing System Septic System Public Sewer System PatioDecking Outdoor Grill Fences Pool Sauna Spa Hot Tub Pool Equipment Pool Heater Automatic Lawn Sprinkler System Fireplace(s) amp Chimney (Woodburning) Fireplace(s) amp Chimney (Mock) Gas Lines (NatLP) Gas Fixtures

Garage Attached Not Attached CarportGarage Door Opener(s) Electronic Control(s)Water Heater Gas ElectricWater Supply ____ City _____ Well ____ MUD _____ Co-opRoof Type ___________________________________ Age _____(approx)

Are you (Seller) aware of any of the above items that are not in working condition that have known defects or that are in need of repair_____ Yes _____ No _____ Unknown

If yes then describe (Attach additional sheets if necessary)

2 Are you (Seller) aware of any known defectsmalfunctions in any of the following

Write Yes (Y) if you are aware write No (N) if you are not aware Interior Walls Ceilings Floors Exterior Walls Doors Windows Roof FoundationSlab(s) Basement WallsFences Driveways Sidewalks PlumbingSewersSeptics Electrical Systems Lighting Fixtures

_____ Other Structural Components (Describe)

If the answer to any of the above is yes explain (Attach additional sheets if necessary)

3 Are you (Seller) aware of any of the following conditions

Write Yes (Y) if you are aware write No (N) if you are not aware Active Termites (includes wood-destroying insects) Previous Structural or Roof Repair Termite or Wood Rot Damage Needing Repair Hazardous or Toxic Waste Previous Termite Damage Asbestos Components


Previous Termite Treatment Urea formaldehyde Insulation Previous Flooding Radon Gas Improper Drainage Lead Based Paint Water Penetration Aluminum Wiring Located in 100-Year Floodplain Previous Fires Present Flood Insurance Coverage Unplatted Easements Landfill Settling Soil Movement Fault Lines Subsurface Structure or Pits


4 Are you (Seller) aware of any item equipment or system in or on the property that is in need of repair Yes (if you areaware) No (if you are not aware) If yes explain (attach additional sheets as necessary)

5 Are you (Seller) aware of any of the following

Write Yes (Y) if you are aware write No (N) if you are not awareRoom additions structural modifications or other alterations or repairs made without necessary permits or not in compliancewith building codes in effect at that timeHomeowners Association or maintenance fees or assessments

Any common area (facilities such as pools tennis courts walkways or other areas) co-owned in undivided interest withothersAny notices of violations of deed restrictions or governmental ordinances affecting the condition or use of the PropertyAny lawsuits directly or indirectly affecting the PropertyAny condition on the Property which materially affects the physical health or safety of an individual


Date Signature of Seller

The undersigned purchaser hereby acknowledges receipt of the foregoing notice

Date Signature of Purchaser


TABLE OF AUTHORITIES

CASES

Adams v Spring Valley Constr Co 728 SW2d 412 (Tex App--Dallas 1987 writ refd nre) 21

Aerospatiale Helicopter Corp v Universal Health Servs Inc 778 SW2d 492 (Tex App--Dallas 1989 writdenied) 21

AM Intl Inc v Intl Forging Equipment 982 F2d 989 (6th Cir 1993) 20

Amland Properties Corp v Aluminum Co of America 711 F Supp 784 802 (DNJ 1989) 19

Anspec Co v Johnson Controls Inc 922 F2d 1240 (6th Cir 1991) 1

Attoe v State Farm Mutual Auto Ins Co 153 NW2d 575 (Wis 1967) 7

Bainville v Hess Oil Virgin Islands Corp 837 F2d 128 (3d Cir 1988) 21

Barnhouse v City of Pinole 133 Cal App 3d 171 (1983) 6

Barras v Monsanto 831 SW2d 859 (Tex App--Houston [14th Dist] 1992 writ denied) 8

Baskin v Mortgage and Trust Inc 837 SW2d 743 (Tex App--Houston [14th Dist] 1992 writ denied) 6

Blue Bell Inc v Peat Marwick Mitchell amp Co 715 SW2d 408 (Tex App--Dallas 1986 writ refd nre) 11

Burk Royalty Co v Walls 616 SW2d 911 (Tex 1981) 10

B-F-W Constr Co v Garza 748 SW2d 611 (Tex App--Fort Worth 1988 no writ) 21

Cameron v Terrell amp Garrett Inc 618 SW2d 535 (Tex 1981) 13 14

Carpenter v Hamilton 62 P2d 1397 (Cal App 1936) 9

Carrell v Denton 157 SW2d 878 (Tex 1942) 6

Century 21 Page One Realty v Naghad 760 SW2d 305 (Tex App--Texarkana 1988 no writ) 14

Chapman v Hosek 475 NE2d 593 (Ill App 1985) 9

Chemical Waste Management Inc v Armstrong World Indus Inc 669 F Supp 1285 (ED Pa 1987) 18 21

Clauser v Taylor 112 P2d 661 (1941) 6

Cobb v Dunlap 656 SW2d 550 (Tex App-- Corpus Christi 1983 writ refrsquod nre) 14

Danciger Oil amp Refining Co of Texas v Powell 154 SW2d 632 (Tex 1941) 18


Delaney Realty Inc v Ozuna 593 SW2d 797 (Tex Civ App--El Paso 1980 writ refd nre) 12

Dennis v Dial Finance amp Thrift Co 401 SW2d 803 (Tex 1966) 10

Doran v Milland Dev Co 323 P2d 792 (Cal App 1958) 11

Dubow v Dragon 746 SW2d 857 (Tex App--Dallas 1988 no writ) 15

Easton v Strasberger 152 Cal App 3d 90 (1984) 7-9

ECC Parkway Joint Venture v Baldwin 765 SW2d 504 (Tex App--Dallas 1989 writ denied) 14

Edward Hines Lumber Co v Vulcan Materials Co 669 F Supp 854 (ND Ill 1987) 9

El Paso Dev Co v Ravel 339 SW2d 360 (Tex Civ App--El Paso 1960 writ refd nre) 15

Federal Land Associates of Tyler v Sloane 793 SW2d 692 (Tex App--Tyler 1990) affd in part revd onother grounds 825 SW2d 439 (Tex 1991) 11

Federal Land Bank Assoc of Tyler v Sloane 825 SW2d 439 (Tex 1992) 10-12

Flenniken v Longview Bank amp Trust Co 661 SW2d 705 (Tex 1983) 14

Florence Mfg Co v J C Dowd amp Co 178 F 73 (2d Cir 1910) 14

FMC Corp v Northern Pump Co 668 F Supp 1285 (D Minn 1987) appeal dismd 871 F2d 1091 (8th Cir1988) 21

Formosa Plastics Corp USA v Presidio Engineers and Contractors 960 SW2d 41 (Tex 1998) 9 10

Garb-Ko Inc v Lansing-Lewis Servs Inc 423 NW2d 355 (Mich Ct App 1988) 19

Gauerke v Rozga 332 NW2d 804 (Wis 1983) 9 11

Geosearch Inc v Howell Petroleum Corp 819 F2d 521 (5th Cir 1987) 10

Gibbs v Main Bank of Houston 666 SW2d 554 (Tex App--Houston [1st Dist] 1984 no writ) 14

Gilbert v Corlett 339 P2d 960 (Cal Ct App 1959) 5

Gill v Baird 32 SW2d 941 (Tex Civ App--Beaumont) affd sub nom 77 SW2d 201 (Tex 1934) 18

Godfrey v Steinpress 128 Cal App 3d 154 (1982) 5

Greenstein Logan amp Co v Burgess Marketing Inc 744 SW2d 170 (Tex App--Waco 1987 writ denied) 11

Greenwood Mills Inc v Russell Corp 981 F2d 148 (4th Cir 1993) 9 17

Gulf Oil Corp v Burlington Northern RR Inc 751 F2d 746 (5th Cir 1985) 21

Hay v Shell Oil Co 986 SW2d 772 (Tex App--Corpus Christi 1999 no writ) 6


Hays v Mobil Oil Corp 736 F Supp 387 (D Mass 1990) affd in part vacated in part 930 F2d 96 (1st Cir1991) 21

Henderson v Ford Motor Co 547 SW2d 663 (Tex Civ App--Amarillo 1977 no writ) 18

Houston Title Co v Ojeda de Toca 748 SW2d 449 (Tex 1988) 14

Hudson v Hinton 435 SW2d 211 (Tex Civ App--Dallas 1968 no writ) 21

Humber v Morton 426 SW2d 554 (Tex 1968) 18

International Clinical Laboratories Inc v Stevens 710 F Supp 466 (EDNY 1989) 20

International Clinical Labs Inc v Stevens 710 F Supp 466 (EDNY 1989) 19

Isenhower v Bell 365 SW2d 354 (Tex 1963) 8

JOHN CRIBBET amp CORWIN JOHNSON CASES AND MATERIALS ON PROPERTY 1454-56 (5th ed 1984) 18

Joseph v PPG Industries Inc 674 SW2d 862 (Tex App--Austin 1984 writ refd nre) 12

Joslyn Mfg Co v Koppers Co Inc 40 F3d 750 (5 Cir 1994) 21th

K amp S Oil Well Serv Inc v Cabot Corp 491 SW2d 733 (Tex Civ App--Corpus Christi 1973 writ refdnre) 21

Kerrville HRH Inc v City of Kerrville 803 SW2d 377 (Tex App--San Antonio 1990 writ denied) 16

Kish v Van Note 692 SW2d 463 (Tex 1985) 15

Knight v International Harvester Credit Corp 627 SW2d 382 (Tex 1982) 14

Koral Ind v Security-Connecticut Life Ins Co 802 SW2d 650 (Tex 1990) 8 9 16

Kubinsky v Van Zandt Realtors 811 SW2d 711 (Tex App--Fort Worth 1991 writ denied) 7

Labbe v Corbett 6 SW 808 (Tex 1888) 16

Leyendecker amp Assoc Inc v Wechter 683 SW2d 369 (Tex 1984) 15

Libhart v Copeland 949 SW2d 800 (Tex App--Waco 1997 no writ) 10

Loma Vista Development Co v Johnson 180 SW2d 922 (Tex 1944) 14

Lyncott Corp v Chemical Waste Management Inc 690 F Supp 1409 (ED Pa 1988) 21

MacDonald v Follet 180 SW2d 334 (1944) 7

Mardan Corp v CGC Music Ltd 600 F Supp 1049 (D Ariz 1984) affd on other grounds 804 F2d 1454(9th Cir 1986) 19


Mardan Corp v CGC Music Ltd 804 F2d 1454 (9th Cir 1986) 17 20 21

Mid Continent Aircraft Corp v Curry County Spraying Serv Inc 572 SW2d 308 (Tex 1978) 18

Middleton v Brawley 12 SW2d 257 (Tex Civ App--Amarillo 1928 no writ) 18

New Jersey v Ventron Corp 468 A2d 150 (NJ 1983) 8

Nolan v Bettis 577 SW2d 551 (Tex App--Austin 1979 writ refd nre) 10 15

NRC Inc v Pickhardt 677 SW2d 292 (Tex App--Texarkana 1984 writ refd nre) 14

Nunn v Chemical Waste Management Inc No 82-1845 (D Kan Mar 1 1985) 11 18

Ohio Oil Co v Smith 365 SW2d 621 (Tex 1963) 21

Pairett v Gutierrez 969 SW2d 512 (Tex App--Austin 1998 writ denied) 19 20

Palm v Mortgage Inv Co of El Paso 229 SW2d 869 (Tex Civ App--El Paso 1950 writ refd nre) 18

Permian Building Inc v Greenblatt 442 SW2d 831 (Tex Civ App--Fort Worth 1969 writ refd nre) 17

Philadelphia Elec Co v Hercules Inc 762 F2d 303 (3d Cir) cert denied 474 US 980 (1985) 8 9

Pleasant Grove Builders Inc v Phillips 355 SW2d 818 (Tex Civ App--Dallas 1962 writ refd nre) 18

Polk Terrace Inc v Harper 386 SW2d 588 (Tex Civ App--Tyler 1965 writ refd nre) 5 16

Porter v Irvine 658 SW2d 711 (Tex App--Houston [1st] 1983 no writ) 12

Prudential Ins Co of America v Jefferson Assoc Ltd 896 SW2d 156 (Tex 1995) 18 19

Rascoe v Anabtawi 730 SW2d 460 (Tex App--Beaumont 1987 no writ) 6

Reed v King 145 Cal App 3d 261 (1983) 6

Robinson v Preston Chrysler-Plymouth Inc 633 SW2d 500 (Tex 1982) 14

Rodenbeck v Marathon Petroleum Co 742 F Supp 1448 (ND Ind 1990) 21

Rosenthal v Blum 529 SW2d 102 (Tex Civ App--Waco 1974 writ refd nre) 10-12

Rublee v Stevenson 161 SW2d 528 (Tex Civ App--Dallas 1942 no writ) 21

Sanchez v Dickinson 551 SW2d 481 (Tex Civ App--San Antonio 1977 no writ) 18

Schenck v Ebby Halliday Real Estate Inc 803 SW2d 361 (Tex App--Fort Worth 1990 no writ) 12

Schlumberger Technology Corporation v Swanson 959 SW2d 171 (Tex 1997) 20


Schnell v Gustafson 638 P2d 850 (Colo App 1981) 8

Scull v Davis 434 SW2d 391 (Tex Civ App--El Paso 1968 writ refd nre) 18

Settlement Cosman v Chevron No 37-48-92 (Cal Super Ct Orange County 1986 filed Mar 24 1982) 8

Singleton v LaCoure 712 SW2d 757 (Tex App--Houston [14th Dist] 1986 writ refd nre) 18

Smith Land amp Improvement Corp v Celotex Corp 851 F2d 86 (3d Cir 1988) cert denied 488 US 1029(1989) 7-9

Smith v Baldwin 611 SW2d 611 (Tex 1981) 12 13

Smith v National Resort Communities Inc 585 SW2d 655 (Tex 1979) 5 10 11 14 20

Southfund Partners III v Sears Roebuck and Co 57 F Supp 2d 1369 (ND Ga 1999) 20 22

Southland Corp v Ashland Oil Inc 19 ENVTL L REP (ENVTL L INST) 20738 (DNJ 1988) 17 1921

Spradling v Williams 566 SW2d 561 (Tex 1978) 14

State of New York v Shore Realty Co 759 F2d 1032 (2d Cir 1985) 8 9 22

Stephanz v Laird 846 SW2d 895 (Tex App--Houston [1st Dist] 1993 no writ) 7

Steubner Realty 19 Ltd v Cravens Rd 88 Ltd 817 SW2d 160 (Tex App--Houston [14th Dist] 1991 nowrit) 11

Stewart Title Guaranty Co v Sterling 822 SW2d 1 (Tex 1992) 11

Stone v Lawyers Title Ins Corp 554 SW2d 183 (Tex 1977) 5

Stone v Lawyers Title Ins Corp 537 SW2d 55 (Tex Civ App--Corpus Christi 1976) affd in part revd inpart 554 SW2d (Tex 1977) 5-7

Ten-Cate v First Natl Bank of Decatur 52 SW2d 323 (Tex Civ App--Fort Worth 1932 no writ) 6

Texas Gas Exploration Corp v Fluor Corp 828 SW2d 28 (Tex App--Texarkana 1991 writ denied) 6

Trenholm v Ratcliff 646 SW2d 927 (Tex 1983) 5 8

United States v Chem-Dyne Corp 572 F Supp 802 (SD Ohio 1983) 22

United States v Lowe 29 F3d 1005 (5 Cir 1994) 21th

United States v Monsanto Co 858 F2d 160 (4th Cir 1988) cert denied 490 US 1106 (1989) 22

United States v Pacific Fur Depot Inc 716 F Supp 1341 (D Idaho 1989) 23


United States v Serafini 706 F Supp 346 (MD Pa 1988) 23

VSH Realty Co v Texaco Inc 757 F2d 411 (1st Cir 1985) 5 7-9

Weitzel v Barnes 691 SW2d 598 (Tex 1985) 13

Western Cottage Piano amp Organ Co v Anderson 101 SW 1061 (Tex Civ App--Fort Worth 1907 writdenied) 9

Wiegmann amp Rose Intl Corp v NL Indus 735 F Supp 957 (ND Cal 1990) 19

Wright v Carpenter 579 SW2d 575 (Tex Civ App--Corpus Christi 1979 writ refd nre) 8 15 16

STATUTES

42 USC sect 4852d (1989 amp Supp 1999) 2 4

42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22

Act of 1983 68th Leg RS ch 949 sectsect 1-2 1983 Tex Gen Laws 5208 16

Environmental Health and Safety Audit Privilege Act TEX REV CIV STAT ANN art 4447cc (Vernon 2000 )24

HR REP NO 962 99th Cong 2d Sess 186-88 reprinted in 1986 USCCAN 3279 3280-81 23

Superfund Amendment amp Reauthorization Act of 1986 Pub L No 99-499 100 Stat 1628-30 1692 16931705 1706 (1986) (current version of CERCLA at 42 USC sectsect 9601-9675) (1997) 22

TEX BUS amp COM CODE ANN sect 1745 (Vernon 1987 amp Supp 2000) 12

TEX BUS amp COM CODE ANN sect 1746 (Vernon 1987 amp Supp 2000) 12 13


TEX BUS amp COM CODE ANN sectsect 1741-826 (Vernon 1987 amp Supp 2000) 13

TEX BUS amp COM CODE ANNsect 2701 (Vernon 1987) 14-16

TEX CIV PRAC amp REM CODE ANN sect 41003 (Vernon Supp 2000) 10


TEX HEALTH amp SAFETY CODE ANN sect 361538(a) (Vernon Supp 2000) 25

TEX HEALTH amp SAFETY CODE ANN sect 361539 (Vernon Supp 2000) 5



TEX HEALTH amp SAFETY CODE ANN Ch 361 Subchapter V (Vernon Supp 2000) 1 22

TEX PROP CODE ANN sectsect 5008-012 5091-094 (Vernon Supp 2000) 2-4

TEX WATER CODE ANN sect 26001 (Vernon Supp 2000) 24 25

TEX WATER CODE ANN sect 26039 (Vernon Supp 2000) 24


REGULATIONS

20 Tex Reg 9535 9536 (1995) 24

30 TEX ADMIN CODE sect 3349 (1998) 4

30 TEX ADMIN CODE sect 330951-963 (1998) 25


30 TEX ADMIN CODE Ch 327 (1998) 24

30 TEX ADMIN CODE Ch 327 334 335 and 350 (1998) 24

30 TEX ADMIN CODE Ch 334 Subchapter D sect 334129 (1998) 24

OTHER AUTHORITY

BLACKS LAW DICTIONARY (5th ed 1979) 7

David J Schenck Remedies for Environmental Liability Rights of the Toxic Grantee 43 BAYLOR L REV 761(1991) 13 22

JENNIFER L MACHLIN amp TOMME R YOUNG MANAGING ENVIRONMENTAL RISK - REAL ESTATE AND BUSINESS

TRANSACTIONS (1990) 5-9 11 17

Penny L Parker amp John Slavich Contractual Efforts to Allocate the Risk of Environmental Liability Is Therea Way to Make Indemnities Worth More than the Paper they are Written On 44 SW LJ 1349 1352 n11(1991) 21

RESTATEMENT (SECOND) OF TORTS sect 552(1) (1977) 10

RESTATEMENT (SECOND) OF TORTS sect 552B (1977) 12

W Page Keeton Fraud--Concealment and Nondisclosure 15 TEX L REV 1 (1936) 6


-i-

TABLE OF CONTENTS

I INTRODUCTION 1

II DISCLOSURE OBLIGATIONS 2A STATUTORY DISCLOSURE OBLIGATIONS 2

1 Residential Property Condition Disclosure 2(a) Improved Property Disclosure 2(b) Unimproved Property Disclosure 2

2 Residential Property Ownersrsquo Association Disclosure 33 Rollback Tax Notice for Vacant Land 34 Lead-Based Paint Disclosure 45 Sellers Disclosure about Storage Tanks 46 Disclosure of CMSWLFs 5

B TORT RISKS FROM NONDISCLOSURE 51 When Nondisclosure Qualifies as Fraudulent Misrepresentation 5

(a) Elements of Fraudulent Misrepresentation 5(b) Defenses to Fraudulent Misrepresentation 8(c) Remedies for Fraudulent Misrepresentation 9

2 When Nondisclosure Qualifies as Negligent Misrepresentation 10(a) Elements of Negligent Misrepresentation 10(b) Defenses to Negligent Misrepresentation 11(c) Remedies for Negligent Misrepresentation 12

3 Statutory Torts 12(a) Deceptive Trade Practices Act 12(b) Fraud in Real Estate and Stock Transactions Act 15

C CONTRACT RISK FROM NONDISCLOSURE 171 Express Warranties 182 As Is Clauses to the Rescue - Perhaps 183 Indemnification 21

(a) Construction of Clauses 21(b) CERCLA Liability Indemnification 21

D CERCLA LIABILITY AND NONDISCLOSURE 221 CERCLA Liability 222 Disclosure Issues Affecting Liability Allocation 22

(a) Innocent Landowner Defense 22(b) Intervening Landowners 23

II REPORTING REQUIREMENTS 23A REPORTING RELEASES FROM STORAGE TANK SYSTEMS 24B REPORTING NON-TANK RELEASES 24C REPORTING CMSWLFS 25






I INTRODUCTION

























9













Id sect 50088

Id sect 5008(f)9

Id sect 5008(b)10


Id sect 5010(f)12
























16

17

18





















Id sect 5010(e)20




Id sect 4852d(a)(2)23

Id sect 4852d(c)24

Id sect 4852d(b)(1)-(3)25






Id sect 361539(b)29











35











757 F2d 411 415 (1st Cir 1985)32

Id33





36


37


SW2d 655 658 (Tex 1979)











46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY















I INTRODUCTION

























9













Id sect 50088

Id sect 5008(f)9

Id sect 5008(b)10


Id sect 5010(f)12
























16

17

18





















Id sect 5010(e)20




Id sect 4852d(a)(2)23

Id sect 4852d(c)24

Id sect 4852d(b)(1)-(3)25






Id sect 361539(b)29











35











757 F2d 411 415 (1st Cir 1985)32

Id33





36


37


SW2d 655 658 (Tex 1979)











46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY



















9













Id sect 50088

Id sect 5008(f)9

Id sect 5008(b)10


Id sect 5010(f)12
























16

17

18





















Id sect 5010(e)20




Id sect 4852d(a)(2)23

Id sect 4852d(c)24

Id sect 4852d(b)(1)-(3)25






Id sect 361539(b)29











35











757 F2d 411 415 (1st Cir 1985)32

Id33





36


37


SW2d 655 658 (Tex 1979)











46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY

































16

17

18





















Id sect 5010(e)20




Id sect 4852d(a)(2)23

Id sect 4852d(c)24

Id sect 4852d(b)(1)-(3)25






Id sect 361539(b)29











35











757 F2d 411 415 (1st Cir 1985)32

Id33





36


37


SW2d 655 658 (Tex 1979)











46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY






























Id sect 5010(e)20




Id sect 4852d(a)(2)23

Id sect 4852d(c)24

Id sect 4852d(b)(1)-(3)25






Id sect 361539(b)29











35











757 F2d 411 415 (1st Cir 1985)32

Id33





36


37


SW2d 655 658 (Tex 1979)











46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY




















35











757 F2d 411 415 (1st Cir 1985)32

Id33





36


37


SW2d 655 658 (Tex 1979)











46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















46


47

48

49

50




Denton 157 SW2d 878 879 (1942))

Id43

Id44






sect 903[1][a][ii]


(1941)



50









55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















55

56


57

58

59

60



Follet 180 SW2d 334 (1944))

Id52




Id at 90255



57


sect 903[1][a][iii]

Id 59









64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY
















64

65


66













66

67









74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















74

75

76

77

78

79


















Id at 4976

Id77




Id80

















803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY
























803 805 (Tex 1966)


(Tex 1981)



















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















94


96

97

98



SW2d at 105



Id at 696 n491


refd nre)



denied)

Id at 19095















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY



















104

105


107

108

109

110











Id102



Id at 800104

618 SW2d 535 (Tex 1981)105

Id at 541106



Id sect 1750108





111











119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY




















119

120

121

122

123

124

125

Id sect 1746(b)(7)112










Id sect 1746(b)(23)119

Cobb v Dunlap 656 SW2d 550 552 554120






SW2d 705 707 (Tex 1983)


627 SW2d 382 389 (Tex 1982)














133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY





















133

134

135


137

138




no writ)




Dist] 1984 no writ)

Id at 559129

180 SW2d 922 (Tex 1944)130






writ)



136


137

138









144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















144

145

146

147







Id140








Id






386 SW2d at 593

146

Id147














157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY





















157







(Vernon 1987)

Id sect 2701(d)150

Id sect 2701(c) (d)151




(Vernon 1987)

Id154

Id155


Id157


sect 903[4][a]













166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY




















166

167

168

169

170




Id162

Id at 150163

Id164


















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY
















175





856 F2d 1464 1470 (10th Cir 1988)171











177








181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY

















181

182

183






959 SW2d 171 (Tex 1997)181

710 F Supp 466 469 (EDNY 1989) see182


982 F2d 989 994 (6th Cir 1993) (citing183














42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY























42 USC sect 9607(a)(2) (1997)185










42 USC sect 9607(e)(1) (1997)190















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY




















198











42 USC sect 9607(a) (1997)194

Id195








42 USC sect 9607(b) (1997)200

Id sect 9601(35)(A)201

Id202











208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















208

209


Id sect 9601(35)(B)204

Id 205



Id this paper207

42 USC sect 9601(35)(C) (1997)208















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY




















216

217



218

219


334 335 and 350




sect 334129


Id Id sect 26001(5)215




Supp 2000)

218

219









C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY


















C REPORTING CMSWLFS

224

225

th

226

Id sect 26001(19)220

Id sect 26039(a)(2)221

Id sect 26039(a)(3)222







Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY











Exhibit A






























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY























CASES



































































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY






















































































































STATUTES


42 USC sect 9601 (1997) 20 22 23

42 USC sect 9607 (1997) 1 20-22





















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY
















REGULATIONS

20 Tex Reg 9535 9536 (1995) 24







OTHER AUTHORITY










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