BEFORE THE ILLINOIS
POLLUTION CONTROL
BOARD
AUG
122005
GRAND PIER CENTER LLC
STATE OF ILLINOIS
AMERICAN INTERNA TIONAL
)
Pollution Control
Board
SPECIALTY LINES INSURANCE CO.
)
as subrogee of GRAND PIER
CENTER LLC
)
)
Complainants
)
PEW 05-15 7
)
(Citizens Enforcement
—
Land)
v.
)
)
RIVER EASTLLC
)
CHICA GO DOCK AND CANAL
TRUST
)
CHICAGO DOCK AND CANAL
COMPANY
)
KERR-McGEE CHEMICAL LLC
)
)
Respondents
)
ANSWER TO
COUNTER-COMPLAINT, AFFIRMATIVE DEFENSES
AND COUNTERCLAIM
Plaintiffs
Grand
Pier
Center
LLC
and
American
International
Specialty
Lines
Insurance
Co.
as
subrogee
of Grand
Pier
Center
LLC
(“Grand
Pier”
and
“AISLIC”
individually,
“Counter-Complaint
Respondents”
collectively)
provide
the
following
answer, affirmative defenses,
and counterclaim
to
Kerr-McGee
Chemical LLC’s
counter-
complaint.
1.
To the extent that the Board
has jurisdiction over the Complaint,
the Board
has jurisdiction
over
this
Counter-Complaint
pursuant
to
35
IAC
103.200
and
Sections
5(d),
3 1(d) and
33(a) of the Act.
Answer:
Denied
2.
In
1997,
Grand Pier
acquired
property
in
Chicago,
Cook County,
Illinois
bounded by
North Columbus Drive,
East
Grand Avenue,
North
St.
Clair
Street
and
East
Illinois
Street, which
property, at time ofacquisition by
Grand Pier,
was paved
and
in
use
as a parking lot.
This site is generally denoted by the address 200 East
Illinois Street.
Answer:
Admitted,
with
the clarification that
the property
is
also
known as
“the RV3
Site.”
3.
Before
acquiring
this
property,
Grand
Pier
retained
one
or
more
environmental
consultants
to
conduct environmental
reviews
that
included
the
200
East
Illinois Street site.
Answer:
Denied.
4.
This
environmental review process indicated that
a site immediately
to
the
east of 200
East
Illinois Street
and
on the other
side of North Columbus Drive at
316
East
Illinois was
undergoing cleanup pursuant to
a
1996 unilateral administrative order
(UAO)
issued
by
the
U.S.
Environmental
Protection
Agency,
pursuant
to
the
Comprehensive
Environmental Response,
Compensation,
and Liability
Act (CERCLA), 42
U.S.C.
§
9601
et.
seq.,
to
address
contamination by
thorium
resulting
from
the
historical
operations of
the Lindsay Light
Co.
in this area of Chicago.
Answer:
Denied.
5.
In April
1999,
Grand Pier’s environmental
consultant
offered
to
conduct a
file review
to
investigate the nature of the environmental
concern for an
additional
cost.
Neither Grand Pier nor any
consultant to
Grand Pier conducted
a
file search
at the EPA to
learn the particulars of the then-ongoing cleanup activities.
Answer:
Counter
—
Complaint
Respondents
are
without
knowledge
or
information sufficient to
form
a belief as
to the truth of this allegation,
and therefore deny
same.
6.
Grand
Pier
knew
or should
have
known
that,
until
construction
of North
Columbus
Drive
in
the
mid-1980s,
the properties
at
316
East
Illinois
Street
and 200
East
Illinois
Street were
contiguous.
Moreover,
a
file
search at
the EPA of the then-ongoing
cleanup
would
have revealed
that
characterization of the contamination pertaining to
the
316
East
Illinois
Street site indicated
that pockets
of thorium
residues
extended
beyond
the Western property boundary
beneath sidewalks and North Columbus Drive.
Answer:
Counter
—
Complaint
Respondents
are
without
knowledge
or
information sufficient to
form
a belief as to
the truth of this
allegation,
and therefore
deny
same.
7.
Although
Grand
Pier
and/or
its
consultants
and
contractors,
conducted
subsurface
borings
at
the
200
East
Illinois
Street
site,
none
was
addressed
to
the
possibility
of thorium
residues
despite
the
fact
that
Grand
Pier
knew
or
should
have
known
of the
presence
of thorium
residues
and/or
the
possibility
of
the
presence
of
thorium residues.
Answer:
Denied.
8.
Ray
M.
Chin,
the
principal
behind
Grand
Pier
and
a
trained
engineer,
previously
worked
for
Commonwealth
Edison
and
was
involved
with
one
or
more
nuclear
power generating
stations,
where
he
obtained
familiarity
with
radionuclides
and
the potential human health
risks
associated with them.
Ray M.
Chin
knew or should have
known ofthe presence of thorium residues at the
200 East Illinois Street site.
Answer:
Admitted
that
Mr.
Chin
is
a
structural
engineer
who
last
worked
for Commonwealth Edison in
1978.
The
remaining allegations are denied.
9.
At
the
time
Grand
Pier
acquired
the property
at
200
East
Illinois
Street
site, it knew
or should have known of the presence ofthorium residues at the site.
Answer:
Denied.
10.
The pavement
covering the
200
East Illinois
Street site
acted
as a shield to
prevent human
exposure
to the “gamma radiation” associated with thorium residues.
In a
September
1999
Enforcement Confidential
Addendum regarding paved
areas adjacent to
the
Lindsay
Light
B
Site,
EPA
determined that
the
radioactive
material
in
the
soils
was
not
water
soluble
and
thus
did
not
present
a
water
contamination
risk
and
that
the
shielding
effects
of the
asphalt,
concrete,
and
overburden
prevent
the
release
of the
radiation
to
humans
or the
environment.
EPA
also
determined
in
the
September
1999
Enforcement Confidential
Addendum
that
the
radioactive
materials would
be
released to
the environment
if the
shielding
materials were
disturbed or if a person tunneled
into the
radioactive
materials.
The
September
1999
Enforcement
Confidential
Addendum
pertains
to the
Action Memorandum
accompanying
an
Administrative Order on
Consent
regarding the Lindsay Light II Site.
Answer:
Counter
—
Complaint
Respondents
are
without
knowledge
or
infomiation
sufficient to form
a belief as
to
the truth of this
allegation,
and therefore deny
same.
11.
In January
2000,
Grand Pier began to
remove the pavement on the
surface
of the
200
East
Illinois
Street site,
to
excavate the
site,
and
to
dispose
of that
material
at
the Beverly Gravel
Site,
a quarry in
Elgin,
Illinois.
Grand Pier undertook these actions
to
prepare
for construction of a
commercial
building
despite the
fact
that
Grand
Pier
knew
or
should
have
known
that
its
actions
would
cause
a
risk
to
human
health
and
the
environment from exposure
to gamma
radiation.
Answer:
Denied.
12.
Only by
Grand Pier’s removal
of the pavement
and
excavation of the
site
for
construction
of
a
commercial
development,
was
the
public
and
the
environment
exposed
to
the
risks of thorium.
Grand Pier
undertook the removal of the
pavement and
excavation of the
site for its own
economic benefit.
Kerr-McGee did not
stand to benefit
economically from Grand Pier’s commercial
development activities.
3
Answer:
Denied.
13.
In
February
2000,
EPA
directed
cessation
of these
excavation
activities
pending
a
survey
to
determine
whether the excavation would
expose
thorium
residues.
After
a
survey
by
EPA
personnel
indicated
the
presence
of
thorium
residues,
EPA
amended
a
1996
unilateral
administrative
order with respect to
the 316 East Illinois
Street
site to
direct
thorium
removal
activities
at
the
200
East
Illinois
Street site by Grand Pier.
EPA also
directed the
removal of the thorium residues
that Grand Pier had
disposed of at
the Beverly Gravel
Site.
Answer:
Denied.
14.
In
March
2000,
Kerr-McGee
and
Grand
Pier
reached
an
agreement
by
which both parties reserved all
rights
to seek
future reimbursement, but,
to
enable prompt
conduct
of
removal
activities
directed
by
EPA,
Kerr-McGee
undertook
to
arrange
transportation
and
disposal
of
thorium
residues
to
be
excavated
by
Grand
Pier’s
contractor at the
200 East Illinois
Street site.
Answer:
Admitted.
15.
As
a
result
of
Grand
Pier’s
actions,
Kerr-McGee
has
incurred
approximately $3.6
million of costs.
Answer:
Denied.
16.
Pursuant to
a consent
decree
under
§
107
of CERCLA,
96
U.S.C.
§
9607,
entered
in
the United
States
District
Court
for
the
Northern
District
of Illinois
in
June
2004,
Kerr-McGee
has
reimbursed
EPA
approximately
$130,000
for
its
costs
of
oversight and response with respect to the 200 East
Illinois Street site.
Answer:
Counter
—
Complaint
Respondents
are
without
knowledge
or
information
sufficient
to
form
a belief as to the truth ofthis
allegation,
and therefore
deny
same.
17.
Grand Pier
has not paid any
share of these EPA costs
or reimbursed Kerr-
McGee
for any ofthe
costs incurred by Kerr-McGee.
Answer:
Admitted,
and
further
stating
that
EPA never
requested Counter
—
Complaint Respondents
to pay the costs
EPA
sought
from
Kerr-McGee,
and that Counter
—
Complaint Respondents
are
under
no
obligation
to
“reimburse”
Kerr-McGee
for costs
Kerr-McGee
incurred
in
the transportation
and
disposal ofhazardous
waste
Kerr-McGee
generated.
4
COUNTER-COMPLAINT COUNT
1:
415
ILCS
5/21(e)
18.
Kerr-McGee
repeats
and
realleges the allegations of paragraphs of 1-17 of
its Counter-Complaint as if fully set forth herein.
Answer:
Counter-Complaint
Respondents
repeat
and
reallege their answers
to
the allegations of paragraphs
1-17 ofKerr-McGee’s Counter-Complaint.
19,
The
Act provides
that no
person shall
dispose,
treat,
store
or abandon
any
waste,
or
transport
any
waste
into
this
State
for
disposal,
treatment,
storage
or
abandonment,
except
at a
site or facility which
meets the requirements of the
Act
and of
regulations and standards
thereunder.
415 ILCS
5/21(e).
Answer:
Counter
—
Complaint
Respondents
admit
that
this
allegation
is
a
reasonably accurate restatement of415
ILCS
5/21(e).
20.
Grand Pier’s removal of asphalt, concrete,
and overburden
at the 200 East
Illinois
Street site,
the excavation of the
site,
and
the
subsequent
disposal of the material
were acts of “disposal,” as that term
is defined in 415
ILCS
5/3.185,
other than at
a site or
facility which meets the requirements ofthe Act
and ofregulations
standards
thereunder.
Answer:
Denied.
AFFIRMATIVE
DEFENSES
For
their
affirmative
defenses,
Grand
Pier
Center
LLC
and
American
International
Specialty
Lines
Insurance
Co.
as
subrogee
of
Grand
Pier
Center
LLC,
incorporate
by
reference
and
adopt
herein
the
specific
factual
averments
contained
in
their Complaint in
support of each of their affirmative defenses,
and
aver the
following:
1.
Kerr-McGee
fails
to allege
any
claim or
cause of action
against American
International
Specialty
Lines
Insurance
Co.
because
even
taking
Kerr-McGee’s
allegations
as
true,
AISLIC
had
no
involvement
with
any
“act
of disposal,”
and Kerr-
McGee has no
direct
action right or claim against AISLIC.
2.
Kerr-McGee’s
claims
are
barred
because
Kerr-McGee
has
acted
as
a
volunteer,
and Kerr-McGee
has
no
right of action
over
against the
Counter
—
Complaint
Respondents
arising
from
actions Kerr-McGee has undertaken and
performed voluntarily.
5
3.
Kerr-McGee
assumed
the
risk,
and
is
estopped
from
asserting
its
claim
against
the
Counter
—
Complaint
Respondents,
in
that
Kerr-McGee
acquiesced
in
and
ratified the
alleged
conduct of Grand
Pier
which
underlie
Kerr-McGee’s
claim against
Counter
—
Complaint Respondents.
4.
Kerr-McGee’s
claim has
been waived
as
a
result
of Kerr-McGee’s
own
actions and omissions.
5.
Kerr-McGee’s claim is barred by the doctrine ofunclean
hands.
6.
Kerr-McGee’s
alleged
injuries
and
damages
were
caused
by
its
own
negligence.
7.
The
alleged
acts or omissions of Grand Pier are not
the proximate cause of
any
alleged
environmental
contamination and
resultant damages complained of by Kerr-
McGee.
8.
Any
injuries,
damages
or conditions
complained of by Kerr-McGee
were
caused by the acts or omissions of third parties not
under the control of Grand Pier.
9:
Kerr-McGee
has failed
to mitigate its purported damages.
10.
Grand Pier Center LLC was
an innocent purchaser of the RV3
Site and did
not possess
any knowledge that the Site was contaminated
by radioactive thorium.
Grand
Pier
Center had
completed its due
diligence investigation of the environmental
condition
of the
Site
by relying upon
an
environmental
consultant ATC
Group Services,
Inc.,
doing
business
as
ATC
Associates,
Inc.
(ATC).
ATC
performed
a
Phase
I
and
Phase
II
Subsurface
Investigation prior to
Grand Pier
Center’s purchase of the
Site.
The
Phase
II
Subsurface
Investigation
Report
did
not
reveal
the
presence
of
radioactive
thorium.
6
Grand
Pier
Center
relied
upon
the
Phase
B
Subsurface
Investigation
Report
when
it
purchased the RV3
Site.
11.
Denying
they
are
liable for any of Kerr-McGee’s claim,
but
in
the
event
that Grand Pier
Center LLC
and American International
Specialty Lines
Insurance
Co.
as
subrogee
of Grand
Pier
Center
LLC
are
found
liable,
Kerr-McGee’s
recovery,
if
any,
must be
limited
to that
portion of damages attributable
to
the
conduct of Grand Pier,
and
which
exceeds those portions of damages attributable
to all
other persons,
including Kerr-
McGee.
Grand Pier
Center LLC
and
American
International
Specialty Lines
Insurance
Co.
as
subrogee
of
Grand
Pier
Center
LLC
adopt
the
averments
contained
in
its
Complaint paragraphs
8,
12-14, 27,
30,
and 32-34,
in support of this
affirmative defense.
COUNTERCLAIM
TO
COUNTER-COMPLALNT
In
accord with
the
Board’s Procedural
Rules,
35
IIl.Adm.Code
103,
and
Illinois
Code of Civil
Procedure,
735
ILCS
5/2-613(d),
Grand
Pier
Center LLC
and
American
International
Specialty
Lines
Insurance
Co.
as
subrogee
of
Grand
Pier
Center
LLC
(“Grand
Pier”
and
“AISLIC”
individually),
assert
this
Counterclaim
to
Kerr-McGee’s
Counter-Complaint,
and aver as follows:
I.
Grand
Pier
and
AISLIC
have
filed
a
Complaint
in
this
action,
the
allegations
of
which
are
incorporated
in
this
Counterclaim
as
though
fully
set
forth
herein.
2.
Grand
Pier
and
AISLIC
further
allege that
prior to
Grand Pier’s purchase
of
the
RV3
Site,
ATC
Group
Services,
Inc.,
doing
business
as
ATC
Associates,
Inc.
(ATC),
was
contracted
for
the
performance
of
a
Phase
I
and
a
Phase
II
Subsurface
Investigation.
7
3.
The
Phase
II
Subsurface
Investigation
Report
represented
that
on
September
15,
1997,
ATC
had
performed
an
investigation
at
the
RV3
Site,
in
order
to
evaluate
subsurface conditions
for potential
soil
and
groundwater
impacts
from previous
uses at
the
Site.
ATC
also represented that
it had placed
a borehole near the eastern edge
of
the
RV3
Site
in
order
to
evaluate
RV3
Site
conditions
in
proximity
to
the
adjacent
Lindsay
Light
II Site,
which
ATC
knew or
should
have
known
was
contaminated
with
thorium.
4.
Defendant
ATC
in
its
Phase
II
Subsurface
Investigation
Report
represented
that
it
had
investigated the
RV3
Site
subsurface
for environmental
impacts
proximate
to
the
Lindsay
Light
II
Site.
ATC
represented
that
its
investigation
did
not
show
adverse impact or contamination of the subsurface soils at the
RV3
Site.
5.
Subsequent
to
ATC’s
investigation
and
Phase II Subsurface
Investigation
Report concerning the
RV3
Site,
Grand Pier
acted in reliance upon ATC’s
representation
and purchased the
RV3
Site.
6.
Grand Pier
was
an
innocent
purchaser of the
RV3
Site,
which
Grand Pier
later discovered on February 29, 2000,
was
contaminated
with radioactive thorium.
7.
At
time of the
events giving
rise
to
this
dispute,
and
at
all
relevant
times
hereto,
there
was
in
existence
in
the
State
of Illinois
an
act
entitled
“Act
in
Relation
to
Contribution
Among Tort Feasors,” 740
ILCS100/5.
8.
Kerr-McGee’s
alleged
injuries
or
damages
suffered
in connection
with
its
Counter-Complaint
were
caused
in
whole
or
in
substantial
part
by
the
negligent
acts
andlor omissions of Kerr-McGee.
8
9.
If Grand
Pier
or AISLIC
are
found
liable
to
Kerr-McGee
in
any
amount
whatsoever,
which
liability
Grand
Pier
and
AISLIC
has
denied
and
continues
to
deny
herein, then
Grand Pier
and AISLIC
will be
entitled
to
contribution
from Kerr-McGee
in
an amount commensurate with its proportion of liability.
WHEREFORE,
Counter-Complaint
Respondents
deny
that
Kerr-McGee
is
entitled
to judgment
for
its
response costs
at
the
RV3
Site
or monies
paid
to
the
United
States
related
to
any
removal
action
at
the
RV3
Site;
thus,
Counter-Complaint
Respondents
pray
that
this
Board
enter judgment
in
their favor
and
against
Kerr-McGee
on
its
Counter-Complaint.
Complainants/Counter-Complaint
Respondents
Grand
Pier
Center
LLC
and
American
International
Specialty
Lines
Insurance
Co.
as
subrogee
of
Grand
Pier
Center LLC,
respectfully request
that
in the event that
Kerr-McGee,
receives
a judgment
in
any
amount
whatsoever, that
this
honorable Court
enter
an
order
granting
Grand
Pier
Center
LLC
and
American
International
Specialty
Lines
Insurance
Co.
as
subrogee
of
Grand
Pier
Center
LLC,
contribution
as
against
Kerr-McGee,
in
amount
commensurate
with
its
proportion of liability
as
determined
by
the trier
of fact
and
for
any
and
all
other relief as this court deems just and appropriate.
Respectfully submitted
this
12th
day of August 2005
GRAND PIER CENT’
Frederick S.
Mueller
Daniel
C.
Murray
Garrett L.
Boehm,
Jr.
JOHNSON
&
BELL,
LTD.
55
East Monroe Street/Suite 4100
Chicago, Illinois 60603-5803
Tel.
312 984
0226
By:
Co.
9
CERTIFICATE OF SERVICE
I,
the
undersigned,
on
oath,
state
that
I
have
served
on
the
date
of July
5,
2005,
the
attached
Plaintiff’s
Answer
to
Kerr-McGee’s
Counter
Complaint,
by
U.S.
mail,
upon
the
following persons:
Attorney for River East LLC and
Chicago Dock and Canal
Trust
Donald J. Moran
PEDERSEN
& HOUPT
161
North Clark
Street, Suite 3100
Chicago, Illinois
6060 1-3242
Attorney for Kerr-McGee
Chemical LLC
John T.
Smith II
COVNGTON
&
BURLING
1201
Pennsylvania Avenue N.W.
Washington, D.C.
20004-2401
Michael
P. Connelly
Garrett C.
Carter
Connelly Roberts
& McGivney LLC
One North Franklin Street
Suite
1200
Chicago,
Illinois 60606
Illinois Pollution
Control Board Hearin~’Officer
Bradley P. Halloran
Hearing
Officer
Illinois
Pollution
Control Board
James R.
Thompson Center, Suite
11-500
100W.
Randolph Street
Chicago, Illinois 60601
Subscribed to
and sworn
before me
CYNTHIA
LEA
TEMPEL
NOTARY PUBLIC
STATE OF
ILLINOIS
M
CommissIon
Ex’~res
0/20/2005
This
12th
day of Augu
~,
2005.
Notth1y Public
My commission
expires:
LTD.
/
