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Appellate court reverses trial judge for second time; summarily dismisses groundwater contamination case against Valero Oil Company

A group of neigbors and the local Baptist Church sued the Valero Energy Corporation and several subsidiary companies, arguing that Valero owed a duty to pay for the clean up of groundwater contaminated by oil products leaking from an abandoned gas station.  Valero argued that since it didn't actuallly hold title to the property and hadn't been involved in the "direct sale" of products in Michigan, the state's courts lacked jurisdiction over Valero.  The neighbors argued that the holding company was hiding behind multiple subsidiaries and that it had sufficient contacts within the state, and connected to this property, to render it liable to adjacent landowners for contamination.

The trial judge concluded that the evidence offered by the parties created a question of fact for jurors to decide.  The Court of Appeals upheld an earlier Valero appeal and sent the case back to the judge to provide additional reasoning for his decision.  The judge arrived at the same result; Valero appealed again; and this month the appellate judges again reversed the judge and granted summary disposition to Valero.  The judges held that the judge had not properly recognized the separate corporate existence of the holding company's subsidiaries, had not properly considered Valero's self-serving affidavits, had not applied the proper test for assessing Valero's "continuous and systematic" ties with the state (i.e., "...the fact that the corporation knows that purchasers of its products will be continuously selling its products within a jurisdiction does not mean that it is carrying on a continuous and systemantic part of its general business within the state...") and that the judge had improperly held Valero accountable for actions taken by "Valero Services, Inc."

Meanwhile, the defenses of two separate homeowner families contesting mortgage foreclosures were summarily rejected and one couple was sanctioned for "frivolous" pleadings. It was ruled that one family lacked "standing" to contest the assignment of its mortgage from one corporation to another; while the other family had not properly alleged "prejudice" in objecting to the lender's violation of a law requiring that mortgage documents be properly recorded.

Thompson O’Neil, P.C.
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Traverse City, Michigan 49684
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