The January 16, 2025, Tennessee Court of Appeals decision in THOMAS MARLIN ROBERTS ET AL. v. TENNESSEE DEPARTMENT OF ENVIRONMENT AND CONSERVATION ET AL. highlights the necessity of investigating the condition of property before purchasing and also investigating the best methods for addressing unforeseen conditions discovered during development. In 2010, ten years after they initially bought the property, the owners discovered underground petroleum storage tanks when they started development of the property. They removed the tanks and some of the surrounding soil and stored the tanks and soil on their residential property and re-covered the area with concrete. Someone notified the Tennessee Department of Environment and Conservation (“TDEC”). TDEC seized the tanks and soil, determined that there was evidence of groundwater contamination, and conducted a remediation that included demolition of the new concrete slab and removal of more than a thousand tons of soil. Almost four years later, TDEC issued a cost recovery order requiring the property owners to pay more than $166,000 for the cleanup. For six years, the property owners unsuccessfully appealed the order through multiple administrative proceedings and then appealed the final administrative decision to the Chancery Court of Tipton County. In 2023, that court ruled that the property owners were not responsible for the cost of TDEC’s remediation project. TDEC appealed that ruling to the Tennessee Court of Appeals, which ruled that the Chancery Court in Tipton County did not have jurisdiction to decide the case, and ordered the trial court to transfer the case to the Chancery Court of Davidson County.
Accordingly, twenty-five years after buying the property, fifteen years after starting to develop the property, and thirteen years after TDEC completed its remediation, the property owners still do not know whether they will be required to pay the substantial costs of remediation of groundwater contamination caused by the underground storage tanks of which they had no knowledge when they bought the property. These property owners may have taken reasonable steps to investigate the prior uses of the property and to handle the tanks, but the case emphasizes how important it can be to have the right experts assisting with such investigations and actions to handling unforeseen subsurface conditions, and the importance of incorporating contractual protections and allocations of risks in property transactions.
