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Wond Family Kapalama, LLC v. Continental Tire The Americas, LLC

United States District Court, D. Hawaii

May 1, 2018

WOND FAMILY KAPALAMA, LLC a Hawai`i limited liability company, Plaintiff,
v.
CONTINENTAL TIRE THE AMERICAS, LLC, an Ohio limited liability company, Defendant. CONTINENTAL TIRE THE AMERICAS, LLC, an Ohio limited liability company, Third-Party Plaintiff,
v.
MELIM LTD., Third-Party Defendant.

          ORDER GRANTING IN PART AND DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT RE: COUNT IV OF COMPLAINT AND DENYING ALL OTHER MOTIONS FOR SUMMARY JUDGMENT

          Leslie E. Kobayashi United States District Judge.

         Before the Court are: Defendant/Counterclaimant/Third-Party Plaintiff Continental Tire the Americas, LLC's (“Continental Tire”) Motion for Summary Judgment as to Counts I, II, and III of Plaintiff's Complaint (“Continental Tire's Counts I-III Motion”); [filed 10/6/17 (dkt. no. 56);] Continental Tire's Motion for Summary Judgment as to Count IV of Plaintiff's Complaint (“Continental's Count IV Motion”); [filed 10/6/17 (dkt. no. 60);] Continental Tire's Motion for Summary Judgment as to Count V of Plaintiff's Complaint (“Continental's Count V Motion”); [filed 10/6/17 (dkt. no. 58);] Plaintiff/Counterclaim Defendant Wond Family Kapalama, LLC's (“Wond Family”) Motion for Partial Summary Judgment Re: Counts I, II, and III of Complaint (“Wond Family's Counts I-III Motion”); [filed 10/11/17 (dkt. no. 66);] and Wond Family's Motion for Partial Summary Judgment Re: Count IV of Complaint (“Wond Family's Count IV Motion”), [filed 10/6/17 (dkt. no. 62)].

         The following memoranda in opposition were filed: Wond Family's memorandum in opposition to Continental's Count IV Motion (“Wond Family's Count IV Opposition”); [filed 11/27/17 (dkt. no. 76);] Continental Tire's memorandum in opposition to Wond Family's Count IV Motion (“Continental's Count IV Opposition”); [filed 11/27/17 (dkt. no. 78);] Wond Family's memorandum in opposition to Continental's Count V Motion (“Wond Family's Count V Opposition”); [filed 12/6/17 (dkt. no. 80)]; Wond Family's memorandum in opposition to Continental's Counts I-III Motion (“Wond Family's Counts I-III Opposition”); [filed 12/18/17 (dkt. no. 83);] and Continental Tire's memorandum in opposition to Wond Family's Counts I-III Motion (“Continental's Counts I-III Opposition”), [filed 12/18/17 (dkt. no. 85)]. On December 13, 2017, Continental Tire filed a reply in support of Continental's Count V Motion (“Continental's Count V Reply”). [Dkt. no. 82.]

         Continental's Count IV Motion and Wond Family's Count IV Motion came on for hearing on December 18, 207, and Continental's Count V Motion came on for hearing on December 27, 2017. On January 7, 2018, this Court issued an entering order (“1/7/18 EO”) finding Continental's Counts I-III Motion and Wond Family's Counts I-III Motion suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). [Dkt. no. 97.] The 1/7/18 EO also informed the parties that Continental's Counts I-III Motion and Wond Family's Counts I-III Motion were denied. On January 9, 2018, this Court issued an entering order informing the parties of its rulings on Continental's Count IV Motion, Wond Family's Count V Motion, and Continental's Count V Motion (“1/9/18 EO”). [Dkt. no. 98.] The instant Order supersedes the 1/7/18 EO and the 1/9/18 EO. For the reasons set forth below, Wond Family's Count IV Motion is granted in part and denied in part, and Continental's Counts I-III Motion, Wond Family's Counts I-III Motion, Continental's Count IV Motion, and Continental's Count V Motion

         BACKGROUND

         Wond Family filed its Complaint on December 28, 2016.[1]It brings this action pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9607, et seq., and the Hawai`i Environmental Response Law (“HERL”), Haw. Rev. Stat. Chapter 128D.[2] [Complaint at ¶ 1.] Wond Family asserts federal question jurisdiction over the CERCLA claim and supplemental jurisdiction over the state law claims. [Id. at ¶¶ 6-7 (citing 28 U.S.C. §§ 1331, 1367; 42 U.S.C. § 9613(b)).] The Complaint alleges the following claims: a CERCLA cost recovery claim pursuant to 42 U.S.C. § 9607(a) (“Count I”); a HERL contribution/indemnity claim pursuant to Haw. Rev. Stat. § 128D-18(d) (“Count II”); a claim for a declaratory judgment regarding liability for future response costs (“Count III”); breach of contract (“Count IV”); and a CERCLA and HERL indemnity claim (“Count V”).

         I. The Parties

         Wond Family is the fee owner of the real property at issue in this case - Tax Map Key (“TMK”) No. (1)1-5-021:024 (“the Property”).[3] [Concise Statement of Facts in Supp. of Continental's Count IV Motion (“Continental's Count IV CSOF”), filed 10/6/17 (dkt. no. 61), at ¶ 1; Separate & Concise Counter-Statement of Material Facts in Opp. to Continental's Count IV Motion (“Wond Family's Responsive Count IV CSOF”), filed 11/27/17 (dkt. no. 77), at § I (admitting Continental's ¶ 1).] It was previously owned by individual Wond family members, but they conveyed their interests to the Wond Family Kapalama Trust (“Wond Trust”) in the 1960s. [Wond Count IV Decl., [4] Exhs. 1-4 (certified copies of Indentures).] ¶ 2011, the Wond Trust conveyed its interest in the Property to Plaintiff. [Wond Count IV Decl. at ¶ 8, Exh. 5 (Limited Warranty Deed).]

         Monmouth, Inc. (“Monmouth”) was the lessee in a lease on the Property from November 1, 1957 to October 31, 2012 (“the Lease”). Clarke Investment Corporation (“Clarke Investment”) acquired Monmouth's interest in the Lease by mesne assignment. [Wond Family's Count IV CSOF at ¶¶ 2-3; Continental's Opp. to Wond Family's Count IV CSOF (“Continental's Responsive Count IV CSOF”), filed 11/27/17 (dkt. no. 79), at § I (admitting Wond Family's ¶¶ 2-3).]

         Clarke Investment, as lessor, and Melim Service & Supply Co., Ltd., as lessee, entered into an Indenture of Sublease of the Property (“the Sublease”) on February 12, 1959. [Continental's Count IV CSOF, Decl. of Lisa A. Bail (“Bail Count IV Decl.”), Exh. A.] Melim Tire & Rubber Co., Ltd. executed an Assignment of Leases (“Assignment”) on September 24, 1968, [5] assigning the Sublease to The General Tire and Rubber Company (“General Tire”).[6] The Assignment was filed in the Land Court on March 17, 1969. [Bail Count IV Decl., Exh. B.] The parties refer to the filing date as the date of the Assignment. [Continental's Count IV CSOF at ¶ 4; Wond Family's Responsive Count IV CSOF at § I (admitting Continental's ¶ 4).]

         In the Assignment, “General Tire and its successors and assigns covenanted that they would ‘observe and perform all of the covenants and agreements in said documents contained and on the part of the Lessee to be paid, observed and performed . . . .'” [Wond Family's Count IV CSOF at ¶ 7; Continental's Responsive Count IV CSOF at § I (admitting Wond Family's ¶ 7).] ¶ 1984, General Tire - which at the was named GenCorp, Inc. - assigned its interest in the Sublease to General Tire, Inc.[7] Kapalama Associates LLC (“Kapalama Associates”)[8] purchased Clarke Investment's interest in the Lease on November 8, 2000 in bankruptcy proceedings, and Kapalama Associates transferred all of its assets to Wond Family in 2012. The Lease and the Sublease expired on October 31, 2012. [Wond Family's Count IV CSOF at ¶¶ 8-11; Continental Tire's Responsive Count IV CSOF at § I (admitting Wond Family's ¶¶ 8-11).] Continental Tire vacated the Property when the Sublease expired. [Continental's Count IV CSOF at ¶ 6; Wond Family's Responsive Count IV CSOF at ¶ 6 (only contesting other portions of Continental's ¶ 6).] Continental Tire does not currently own or operate a facility on the Property. [Continental's Count IV CSOF at ¶ 12; Wond Family's Responsive Count IV CSOF at § I (admitting Continental's ¶ 12).] During the term of the Lease and Sublease, Wond Family, the individual Wond family members, the Wond Family Trust, and Kapalama Associates did not have access to the Property. [Pltf.'s Separate & Concise Statement of Material Facts in Supp. of Wond Family's Counts I-III (“Wond Family's Counts I-III CSOF”), filed 10/6/17 (dkt. no. 65), Decl. of Michael M. Wond, Jr. (“Wond Counts I-III Decl.”) at ¶ 26.]

         II. Use of the Property

         Wond Family states that, on or before 1955, Melim was operating a tire recapping and automotive service business on the Adjoining Property. [Mem. in Supp. of Wond Family's Count IV Motion at 5 (citing Wond Family's Count IV CSOF, Decl. of Dan Ford (“Ford Count IV Decl.”), Exh. 24 (excerpt of Expert Report dated 9/11/17 by Ford Canty & Associates, Inc. (“Ford Report”)), App'x B-1).[9] According to Wond Family, sometime after Melim entered into the Sublease, it began using both the Property and the Adjoining Property to operate its business. [Wond Count IV Decl. at ¶ 24.] However, Continental Tire presents evidence that the Property was used primarily as a parking lot for the tire business - which was operated on the Adjoining Property - until approximately 1992 or early 1993. [Concise Statement of Facts in Supp. of Continental's Counts I-III Motion (“Continental's Counts I-III CSOF”), filed 10/6/17 (dkt. no. 57), Decl. of Lindsay Friedman (“Friedman Decl.”) at ¶ 3.[10]

         In 1968, Melim sold its business to General Tire, and the business was renamed “Melim General Tire Service.” [Ford Report, App'x D (various newspaper advertisements and articles) at 1-4.] From 1968 to 1993, General Tire and its successors used both properties to operate a tire sales and recapping/automotive services business.[11] Either Continental Tire or its predecessors had possession and control of the Property from September 24, 1968 until at least October 31, 2012. [Wond Count IV Decl. at ¶¶ 25, 27.]

         Melim used a building, which it constructed, on the Adjoining Property to operate its business (“Service Station A”).[12] Service Station A “was expanded such that part of its footprint was on the Property, ” but it was demolished in the 1990s. [Id. at ¶ 26.] ¶ 1968 Honolulu Star-Bulletin article stated Melim's “Waiakamilo Road plant . . . has 35, 000 square feet under roof.” [Ford Report, App'x D at 1-2.] Service Station A had seven underground hydraulic lifts, which crossed onto the Property. When the lifts were removed in 1995, hydrocarbon impacted soil was found underneath, prompting a removal action. [Wond Family's Counts I-III CSOF, Decl. of Elijah Yip (“Yip Counts I-III Decl.”), Exh. 69 (Site Assessment and PCS Removal Action Former General Tire Location, dated 6/26/02, revised 1/30/04, by Hawai`i International Environmental Services, Inc. (“HIES Report”)) at 1-2 & Figure 6).] The hydraulic lifts “were likely used for various automotive services, including tire changing, and related vehicle repair and maintenance activities.” [Ford Report at 5.]

         In or around 1983, Continental Tire built an automotive services building on the Property (“Service Station B”). It was demolished in 2012. [Wond Count IV Decl. at ¶ 29.] General Tire's Building Permit Application, approved on January 24, 1983, describes the work as a “NEW REPAIR AREA.” [Yip Count IV Decl., Exh. 52 (“1/24/83 Building Permit”).] Based on building permits and the drawings attached thereto, Service Station B had three service bays and three hydraulic lifts. [Yip Counts I-III Decl., Exh. 72 at 1-2, Exh. 73 at 1; Ford Report at 6.] There was also an oil/water separator (“OWS”) system adjacent to Service Station B. [HIES Report at CTA-000246; Ford Report, Figure 4.]

         The OWS and drain system serviced the facilities on both properties, collectively. [Ford Report at 6.] The OWS drains and pipes delivered wastewater into a concrete box adjacent to Service Station B. [Id.; 1/24/83 Building Permit.] At the southern end of Service Station A, on the border between the Property and the Adjoining Property, there was a 250-gallon boiler fuel underground storage tank (“UST”). [Ford Report at 5 & Figure 4.] It was installed in 1966, and “USTs installed during this time period did not have stringent designs or leak detection systems, and releases were common.” [Id. at 5.]

As part of this system, floor drains were installed lengthwise along the edge of the roof overhang of Service Station A on [the Adjoining Property], and the bay opening of Service Station B on the [Property]. The purpose of these floor drains is to collect oily wastewater from daily operations. Both floor drains were outdoors (not contained within the buildings) and exposed to open air. The floor drains emptied into 3-inch cast iron piping, which extended parallel to the floor drains and delivered wastewater to the OWS system located in a concrete box adjacent to Service Station B. . . . There was a 100-gallon waste oil UST located adjacent to the OWS, which collected the oil for eventual disposal. . . .
Construction drawings also indicate that following closure of the boiler UST in 1988, it was replaced by a boiler fuel above-ground storage tank (AST). The AST was located in the southern corner of the site, as shown approximately on Figure 4. In photographs of the site, an additional floor drain was noted adjacent to the boiler AST, which extended north towards the service stations. It is suspected to have merged with the OWS system.

[Id. at 6.]

         As of October 1, 1968, Melim was a General Tire general distributor, and its tire recapping work included “giant aircraft and plantation-type tires.” [Id., App'x D at 1-2.] According to a 1970 advertisement, after acquiring Melim, Continental Tire's predecessor continued to replace tires for passenger vehicles, as well as farm and industrial vehicles, and to perform tire recapping. [Id. at 7-8.] During the years of its operation, the business's services also included, inter alia: oil and oil filter changes; transmission services; battery sale and servicing; radiator flushing and filling; selling antifreeze coolant; and various brake services. [Ford Report, App'x D (various advertisements).]

         Continental General Tire, Inc. and Oahu Construction Company, Ltd. (“Oahu Construction”) entered into a License Agreement dated January 31, 1997, allowing Oahu Construction to use the Property “from February 1, 1997 through May 31, 1997 for the staging of materials and equipment during construction and installation of water lines along Dillingham Boulevard.” [Yip Counts I-III Decl., Exh. 66 (License Agreement) at 1.] The Ford Report states:

Photographs of the site during this time period show large stockpiles of soil on the site. The source of the stockpiles is unknown. Vegetation was observed growing from the soil, indicating that piles had been there for some time. Because the source of the fill material is unknown test results are not available, there is potential that the fill material could have contributed to the contamination at the site.

[Ford Report at 7 & App'x E at 39-41 of 63 (dkt. no. 65-49).[13]

         The June 26, 2002 HIES Report, revised January 30, 2004, states: “The majority of the Site is currently being used as an unpaved gravel parking lot. A very small portion of the parcel is used as a staging area by a construction company, Okada Trucking. Okada Trucking occupies all of the adjacent parcel north of the Site.” [HIES Report at pg. 1-2.]

         III. Contamination Issues

         Wond Family represents that, in 2011, it began to evaluate the environmental condition of the Property in anticipation of the expiration of the Lease and Sublease. [Mem. in Supp. of Wond Family's Count IV Motion at 9.] Wond commissioned a Phase I environmental site assessment (“ESA”) report by Bureau Veritas North America, Inc. (“Bureau Veritas”) regarding the Kapalama properties owned by Kapalama Associates, including the Property (“Phase I Report”). [Ford Count IV Decl., Exh. 25 (Phase I Report, dated August 12, 2011).] Wond Family argues the Phase I Report: “identified several recognized environmental conditions including lack of documentation regarding remedial work after a petroleum release was discovered on the Property, and the likelihood of contamination from prior automotive repair and services conducted on the premises”; and it recommended a Phase II ESA for the Property. [Mem. in Supp. of Wond Family's Counts I-III Motions at 13-14 (citing Phase I Report at 37-38).] After Continental Tire refused Wond's request for access, Wond Family had its attorney - Philip Leas, Esq. - contact Continental Tire's in-house counsel - Kevin Collins, Esq. - in a February 23, 2012 letter. Mr. Leas stated that: page 7, section 13 of the Sublease required Continental Tire to permit Kapalama Associates and its agents to enter the Property to examine its condition; Kapalama Associates invoked that clause to perform a Phase II investigation; Kapalama Associates intended to conduct the investigation at its own expense to see if any remediation was necessary. [Wond Family's Count IV CSOF, Decl. of Philip J. Leas (“Leas Count IV Decl.”), Exh. 26 (2/23/12 letter) at 1.] Mr. Leas emphasized that Kapalama Associates and Wond Family expected Continental Tire would return the Property in good condition at the end of the Sublease. This included the removal of a derelict structure on the Property, i.e., “[t]he ultimate condition of property should be a paved lot free of debris.” [Id. at 2.] Wond Family asserts the derelict structure Mr. Leas was referring to was Service Station B. [Mem. in Supp. of Wond Family's Count IV Motion at 10.]

         After various disputes with Kapalama Associates, Continental Tire had the structure removed, but, according to Kapalama Associates, “it broke off from an underground pipe that seemed to be directed toward a concrete patch in the pavement that may be the site of an underground tank.” [Leas Count IV Decl., Exh. 30 (email chain between Leas and Collins from 5/22/12 to 7/20/12) at ¶ 000030.] Mr. Leas stated the remaining pipe was an environmental concern. [Id.] Further, the removal resulted in “a large depression about two feet deep below the natural grade of the property, ” and Kapalama Associates required that the Property be restored to grade before the end of the Sublease. [Leas Count IV Decl., Exh. 32 (email chain between Leas and Collins from 5/22/12 to 10/10/12) at ¶ 000095.] Mr. Collins asserted the Property was in sufficiently restored condition, and any depression was imperceptible. [Id.]

         On October 15, 2012, Mr. Leas sent Mr. Collins an email with photographs showing the hole in the ground, and he argued that the hole was “much more than imperceptible.” [Leas Count IV Decl., Exh. 33 at ¶ 000079.] On October 30, 2012, Mr. Collins advised him the hole had been filled in. [Id., Exh. 34 (email chain from 10/30/12 to 12/6/12) at ¶ 000091.]

         From September 14 to 18, 2012 and on November 8, 2012, ENPRO Environmental (“ENPRO”) conducted Phase II sampling and analysis on the Property on Continental Tire's behalf.[14] ENPRO's soil and groundwater sampling detected benzo(a)pyrene and lead levels in excess of HDOH's Tier 1 Environmental Action Levels for commercial/industrial use (“Tier 1 C/I EALs”). [Wond Family's Count IV CSOF at ¶¶ 29, 31; Continental Tire's Responsive Count IV CSOF at § I (admitting Wond Family's ¶¶ 29, 31).] “ENPRO recommended excavating the near surface soil in the immediate vicinity of the locations where sampling detected contamination above Tier 1 C/I EALs.” [Wond Family's Count IV CSOF at ¶ 31; Continental Tire's Responsive Count IV CSOF at § I.] ENPRO's Phase II Report states no contaminants beyond the Tier 1 C/I EALs were found in the samples collected in November 2012. [Phase II Report at 2.] ENPRO opined that

the near surface soil contaminants previously identified at concentrations greater than the DOH Tier [C/I] 1 EALs were isolated to those original locations at Borings 4, 5, and 6. Furthermore, groundwater contaminants previously identified at concentrations greater than the DOH Tier 1 [C/I] EALs were due to suspended solids because their presence was not confirmed when the sample was filtered and analyzed for dissolved contaminants.
ENPRO recommends excavating the near surface soil in the immediate vicinity of the sample locations at Borings 4, 5, and 6 where contaminants were detected at concentrations greater than DOH Tier 1 [C/I] EALs. Excavated contaminated soil should be disposed of at a certified on-island landfill and may require additional characterization, including toxicity characteristic leaching procedure (TCLP) analysis for lead, in order to meet the landfill acceptance criteria.

[Id.]

         Mr. Leas received ENPRO's Phase II report on December 22, 2012. [Leas Count IV Decl., Exh. 47 at ¶ 000103-0 (email chain, with attachment, between Leas, Leas's assistant, and Collins from 12/19/12 to 12/22/12).] Noting work for the Phase II Report was done on the Property after the expiration of the Sublease, Mr. Leas informed Mr. Collins that Kapalama Associates intended to issue an invoice for carryover rent until the Property was cleaned up and “in good repair, order and condition, ” as required by the Sublease. [Id., Exh. 36 (letter dated 1/3/13).] In addition, Wond Family retained Bureau Veritas to review ENPRO's work. Bureau Veritas prepared a letter, dated February 20, 2013, to Wond, summarizing the Phase II Report and identifying “a number of significant issues with ENPRO's investigation methodology, the quality of documentation, questions regarding sample integrity, the quality of documentation and their conclusions” (“2/20/13 Bureau Veritas Review Letter”). [Wond Family's Counts I-III CSOF, Decl. of John P. Rau (“Rau Counts I-III Decl.”), Exh. 28 at 2.[15] Two of the fourteen issues identified in the 2/20/13 Bureau Veritas Review Letter were: the lack of “rationale for the location of boreholes and depths of sample location”; and improper comparison to the HDOH Tier 1 C/I EALs. [Id. at 3.] Bureau Veritas transmitted the 2/20/13 Bureau Veritas Review Letter to HEER. [Rau Counts I-III Decl., Exh. 27 (letter dated 3/8/13).]

         From February 13 to 21, 2013, ENPRO excavated “a 20-foot by 20-foot area impacted by benzo(a)pyrene and a 20-foot by 40-foot area impacted by lead, ” each to a depth of two feet below ground surface (“bgs”). [Leas Count IV Decl., Exh. 48 (excerpt of ENPRO Soil Removal & Disposal and Confirmation Sampling & Analysis, dated 3/12/13 (“Phase III Report”)) at 1.[16] ENPRO subsequently performed field testing to analyze the effectiveness of the remediation activities. The testing of samples collected from the remediation areas did not identify Polynuclear Aromatic Hydrocarbons (“PAHs”) or Total Lead at levels exceeding HDOH Tier 1 C/I EALs. [Id.] ENPRO's excavation uncovered “a concrete box, believed to be a former oil-water separator, with metal piping, a concrete slab beneath the oil-water separator, and surrounding pea gravel . . . in the 20-foot by 20-foot remediation area.” [Id.] ENPRO removed the OWS, but “[t]he concrete slab and associated piping were left at the project site for future removal and disposal at the request of the client.” [Id. at 12.] Continental Tire took the position that the Phase III Report showed no further action was necessary as to the contaminants at the Property, but Kapalama Associates asserted their expert's analysis showed further testing was necessary. [Leas Count IV Decl., Exh. 48 at ¶ 000174-76.] The Phase III Report was filed with HDOH, and Continental Tire anticipated that a No Further Action (“NFA”) determination would be issued as to the Property. [Id. at ¶ 000174.]

         On March 1, 2013, Bureau Veritas collected samples from the open excavations on the Property and completed analytical testing “to provide some preliminary data regarding the effectiveness of ENPRO Environmental's remedial action.” [Wond Family's Counts I-III CSOF, Decl. of Philip J. Leas, (“Leas Counts I-III Decl.”), Exh. 50 (email dated 3/12/13 to Collins from Leas forwarding 3/11/13 email from Rau transmitting table summarizing test results) at ¶ 000172.] Mr. Rau stated:

Both samples reported total petroleum hydrocarbons (TPH)-residual range organics (RRO) and benzo(a)pyrene at concentrations that exceeded the Hawaii State Department of Health (DOH) Tier 1 Environmental Action Levels (EALs). In addition, Sample 13022-S1 reported polychlorinated biphenyls (PCBs) at concentrations that exceeded the DOH Tier 1 EALs.
The analytical results indicate that concentrations of several constituents remain at levels that exceed the DOH Tier 1 EALs.

[Id.]

         On September 23, 2013, HEER issued a letter to Continental Tire, stating:

The Phase II investigation conducted by ENPRO has been determined to be deficient in many HDOH requirements and cannot be considered appropriate for characterizing the site or determining necessary remedial actions. Some but not all of the deficiencies can be found in Bureau Veritas's letter of February 20, 2013 attached. Therefore, the report is rejected as a Phase II site characterization based on numerous technical errors. HDOH requires a full site characterization of 1385 Colburn Street following the procedures detailed in the [HDOH Technical Guidance Manual (“TGM”)].
Due to the substantial amount of technical errors - including sampling and analytical errors, and lack of sufficient detail - the Phase II report is inadequate for determining additional remedial actions for the site and HDOH cannot accept the Phase III report or issue a determination of No Further Action for the soil removal action.

[Leas Count I-III Decl., Exh. 53 (9/23/13 letter to Ken Miller from Jordan Nakayama, Project Manager, HEER) at ¶ 000356.] Mr. Leas thereafter informed Continental Tire's counsel, Lisa Bail, Esq., that $171, 257.89 in carryover rent was due from the expiration of the Sublease to October 2013 because Continental Tire failed to complete the required remediation of the Property. [Leas Count IV Decl., Exh. 40 (letter dated 10/25/13) at 1-3.] Ms. Bail responded that Continental Tire did not owe carryover rent because there was no evidence of contaminants that exceeded the Tier 1 C/I EALs. [Id., Exh. 41 (letter dated 1/27/14).]

         On January 27, 2014, Continental Tire's counsel transmitted to Wond Family's counsel a draft Follow-Up Site Investigation Work Plan, dated January 25, 2014 by Kevin S. Kennedy Consulting, LLC (“Kennedy Consulting” and “the Work Plan”). [Leas Counts I-III Decl., Exh. 55 (letter to Leas from Bail transmitting the Work Plan).] On February 3, 2014, Wond Family's counsel sent Continental Tire's counsel an email transmitting a letter of the same date to Wond by Bureau Veritas commenting on the Work Plan (“2/3/14 Bureau Veritas Review Letter”). [Id., Exh. 56.] The 2/3/14 Bureau Veritas Review Letter was submitted to HDOH. [Rau Counts I-III Decl. Decl., Exh. 29 (2/25/14 email to Nakayama from Rau).] One of the concerns raised in the 2/3/14 Bureau Veritas Review Letter was that:

The Work Plan includes the establishment of only three [decision units (“DUs”)] for the site. Three DUs are not an adequate number to reasonably assess the property based on the number of historical uses the property and known areas of contamination. Section 3.4 of the TGM states that “the appropriate type, size, shape and number of DUs for a given project is necessarily site-specific and must take into consideration the historical, current and future use of the site.”
The Work Plan discusses numerous historical uses that do not appear to have been considered during the design of the three DUs. Historical environmental uses include the following:
• A boiler underground storage tank (UST). No documentation exists showing that the UST was removed and proper assessment of the excavation conducted.
• Past release of hydraulic oil on the adjacent 505 Waiakamilo Road property.
• The former Oil/Water Separator (OWS).
• The drainage trenches, at least one of which remains ...

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