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North Carolina Court of Appeals Caps UST Damages to Diminution in Property Value

Illustrating the limits on damages available to North Carolina landowners in toxic tort cases, the North Carolina Court of Appeals upheld a trial court’s order capping damages at the diminution in the value of the contaminated property.  BSK Enters., Inc. v. Beroth Oil Co., 783 S.E.2d 236 (N.C. Ct. App. 2016).

In a suit claiming nuisance, trespass, and violation of North Carolina’s Oil Pollution and Hazardous Substances Control Act, Plaintiffs alleged that Defendant’s leaking underground storage tanks contaminated the groundwater under Plaintiffs’ property, a commercial warehouse and distribution facility.  At trial the jury found that the contamination resulted in a $108,500 diminution in the value of Plaintiffs’ property.   The jury also awarded $1.5 million in reparation damages for the cost of remediating the groundwater beneath Plaintiffs’ property. The trial court, however, capped the damages at the diminished value of the property and refused to award reparation damages.

The Court of Appeals affirmed the trial court’s cap.  The Court held that where the cost to restore the property is disproportionate to or greatly exceeds the diminution in value of the property, the proper calculation for damages is merely the diminution of the property’s value. Id. at 249.  The Court noted the “personal use” exception to this doctrine, whereby a plaintiff may recover reparation damages in excess of the diminution of value if the plaintiff’s property has a personal use, such as a home.  Here, however, Plaintiffs were business entities that did not qualify for the exception. 

© 2020 Beveridge & Diamond PC National Law Review, Volume VI, Number 146

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About this Author

Anthony G. Papetti Environmental Litigation Attorney Beveridge & Diamond New York, NY
Associate

Anthony’s practice focuses on general environmental litigation and automotive regulatory compliance.

For the past two years, his experience has been extensively involved in the Department of Justice-appointed Independent Corporate Compliance Monitor and Audit matter in connection with the Volkswagen AG diesel emissions proceedings. During this experience, Anthony has gained tremendous insight into complex corporate compliance management systems and the automotive product development process, including both domestic and international vehicle emissions certification...

202-789-6042
Daniel M. Krainin Environmental Litigation Attorney Beveridge & Diamond New York, NY
Principal

Dan deploys more than two decades of environmental litigation experience to resolve clients’ legal and business challenges.

Primarily focused on environmental and toxic tort litigation, Dan helps clients successfully resolve groundwater contamination, hazardous waste site remediation, natural resource damages, permit defense and product-related matters. He enjoys using his skills as a litigator to help clients solve environmental problems.

Among his many wins, Dan successfully led a team that defeated an emergency challenge to a permit that Dan’s client needed to continue its operations. The favorable result that Dan and his team achieved allowed the client to avoid losing millions of dollars’ worth of production.

In a toxic tort case involving an alleged international conspiracy, Dan led a successful briefing effort that resulted in early dismissal of all claims against his clients, saving them from protracted litigation and protecting their reputation.

While focusing his practice on litigation, Dan also provides practical and actionable advice designed to minimize environmental risk and potential liabilities. 

An active member of various bar associations, Dan is a past chair of the American Bar Association’s Environmental Litigation and Toxic Torts Committee, and currently co-chairs the New York State Bar Association Environment Section’s Toxic Torts Committee. Dan has also served as a member of the firm’s Management Committee.

Before joining Beveridge & Diamond, Dan clerked for The Honorable Carlos R. Moreno, U.S. District Judge for the Central District of California. Prior to attending law school, Dan served as editor-in-chief of the environmental news service Greenwire.

212-702 5417
Eric L. Klein Environmental Litigation Attorney Beveridge & Diamond Boston, MA
Principal

Eric makes complex subjects simpler.

He is an environmental litigator in the Boston office of Beveridge & Diamond, with a national practice representing major companies and municipalities in a wide variety of matters including environmental and mass torts, class actions, and federal citizen suits under environmental statutes including the Clean Water Act, the Safe Drinking Water Act, and the Clean Air Act. He has handled cases in state and federal courts throughout the United States, litigating complex civil and commercial matters before juries, trial and appellate courts,...

617-419-2316
Graham C. Zorn Environmental, Toxic Tort, Products Liability Litigation Attorney Beveridge & Diamond Washington, DC
Principal

Graham Zorn focuses his practice on environmental, toxic tort, and products liability litigation.

His representative experience includes extensive work on a series of complex products liability and toxic tort cases related to alleged groundwater, and litigation over lead in drinking water. He has represented individual businesses, trade associations, and municipalities in litigation, as well as in compliance, enforcement, and counseling matters involving the Clean Air Act, the Clean Water Act, CERCLA and other state and federal environmental statutes. He also counsels domestic and...

202-789-6024