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The Cures owned commercial property that they leased to a dry-cleaning tenant, who used perchloroethylene (“PCE”) as a solvent. The Neals owned property nearby and found that the value of their property had been decreased by PCE in the soil and in the air inside their building. Therefore, they sued both the Cures and their tenant. The Neals settled with the tenant and the trial court granted summary judgment to the Cures on all counts. The Neals appealed.

The first issue the Court addressed on appeal was whether it could consider much of the evidence that the Cures relied upon when moving for summary judgment. The Neals argued that this evidence was not properly designated to the trial court. In a footnote, the Court held that "[t]he entire designation must be in a single place" and disregarded the improperly designated evidence.

The Court next dealt with whether the Cures could be liable for a nuisance committed by their tenant. The Court recognized that a landlord could be liable for a tenant's nuisance if, among other things, the landlord knew of the tenant's nuisance and could stop it, but did not. It then specifically rejected the Neals' invitation to adopt Section 837 of the Second Restatement of Torts, pursuant to which the Cures would be liable if they "knew," "should have known," or "had reason to know" the tenant was creating a nuisance.


The Court next turned to decide whether the Cures could be liable under the Environmental Legal Act (ELA) for contributing to the contamination. The Legislature did not define "contribute" and the Court found that "our goal when construing the term 'contribute' should be to hold accountable all parties 'responsible for creating contaminations.'" Because the Cures "were not involved in the alleged release of hazardous substances and had no knowledge of the release," they could not be said to have contributed to the contamination. The Court then discussed why the Neals' claims for trespass and negligence likewise failed.

There are two major lessons to be taken from this case. First, remember that your designations of evidence for the purposes of summary judgment must be in a single place, or they may be disregarded. Second, Indiana's courts are unlikely to find a landlord liable for the pollution of its tenant unless the landlord somehow participated in or acquiesced to the contamination.

Brad A. Catlin
Price Waicukauski & Riley, LLC
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