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Ashley II of Charleston, L.L.C. v. PCS Nitrogen, Inc.

Supreme Court of South Carolina

July 23, 2014

Ashley II of Charleston, L.L.C., Plaintiff,
v.
PCS Nitrogen, Inc., Defendant-Third-Party Plaintiff,
v.
Ross Development Corporation; Koninklijke DSM N.V.; DSM Chemicals of North America, Inc; James H. Holcombe; J. Holcombe Enterprises, L.P.; J. Henry Fair, Jr.; Allwaste Tank Cleaning, Inc.; Robin Hood Container Express; and the City of Charleston, Third-Party Defendants

Heard March 4, 2014

ON CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR SOUTH CAROLINA. Appellate Case No. 2013-001766. Margaret B. Seymour, United States District Judge.

Wm. Howell Morrison, of Haynsworth Sinkler Boyd, P.A., of Charleston, John B. Williams, of Cozen O'Connor, of Washington, D.C.; and Sandra Kaczmarczyk, of Alton Associates PLLC, of Washington, D.C., for Defendant/Third-Party Plaintiff.

G. Trenholm Walker, and Daniel S. " Chip" McQueeney, Jr., both of Pratt-Thomas Walker, P.A., of Charleston; and T. McRoy Shelley, III, of Rogers Townsend & Thomas, PC, of Columbia, for Third-Party Defendant.

JUSTICE KITTREDGE. TOAL, C.J., PLEICONES, BEATTY, JJ., and Acting Justice Eugene C. Griffith, Jr., concur.

OPINION

Page 20

[409 S.C. 488] KITTREDGE JUSTICE  

We certified the following question from the United States District Court for the District of South Carolina:

Does the rule that a contract of indemnity will not be construed to indemnify the indemnitee against losses resulting from its own negligent acts, unless such intention is [409 S.C. 489] expressed in clear and unequivocal terms, apply when the indemnitee seeks contractual indemnification for costs and expenses resulting in part from its own strict liability acts?

In the context of the underlying claim in federal court, we answer the certified question, " no."

I.

Central to this certified question is the operation of a fertilizer-manufacturing site (Site) in Charleston, South Carolina, that spanned approximately forty-three acres, and was owned at various times by the parties. In 1906, Ross Development Corp.[1] purchased the Site and operated a fertilizer manufacturing facility until 1966. The fertilizer manufacturing process led to arsenic, lead, and acid contamination at the Site.

In 1966, Ross sold the Site to PCS Nitrogen, Inc.[2] The purchase agreement included an indemnity provision, which stated: " [Ross] agrees to indemnify and hold harmless [PCS] in respect to all acts, suits, demands, assessments, pr[o]ce[e]dings and cost and expenses resulting from any acts or omission[s] of [Ross] occurring prior to the closing date . . . ."

During the approximately twenty years PCS owned the site, it contributed to the environmental contamination by continuing to manufacture fertilizer and disturbing the contaminated soil during various demolition activities. In 2003, Ashley II of Charleston, Inc. (Ashley II) purchased 27.62 acres of the Site. Since that time, ...


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