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Agere Systems, Inc. v. Worthington Steel Co.

Superior Court of Delaware, New Castle

September 12, 2013

Agere Systems, Inc., Cytec Industries, Inc., Ford Motor Company, SPS Technologies, LLC, and TI Group Automotive L.L.C., Plaintiffs,
Worthington Steel Company, Defendant.

Submitted Date June 3, 2013

Decision After Trial Verdict for Plaintiffs

Sean J. Bellew, Esquire, Ballard Spahr LLP, and Glenn A. Harris, Esquire, Ballard Spahr LLP, pro hac vice. Attorneys for the Plaintiffs.

Theodore A. Kittila, Esquire, Elliott Greenleaf, Wilmington, Delaware 19899-2327. Attorney for the Defendant.




This complex litigation arises from a dispute among the parties with respect to their obligations under the terms of a settlement agreement between Plaintiffs on the one hand, and Worthington Steel Company ("Worthington") and NRM Investment Company, Inc. ("NRM") on the other, to pay costs associated with remediation of environmental contamination at a Superfund Site.

Plaintiffs, Worthington and NRM executed an agreement (the "Worthington Settlement Agreement" or "Settlement Agreement") that obligated Worthington to pay 13% of future costs incurred at the Superfund site. After Worthington failed to contribute its cost share in accordance with the Settlement Agreement, Plaintiffs filed this action for declaratory judgment and breach of contract damages. Worthington counterclaimed, seeking a declaratory judgment and alleging there was mutual mistake as to its obligations.[1] This is the Court's decision after trial, [2]finding for Plaintiffs based on the clear and unambiguous language in the Settlement Agreement setting forth Worthington's obligations, and determining that there was no mutual mistake.


Upon consideration of the Proposed Findings of Fact and Conclusions of Law, the responses thereto, and the trial testimony, exhibits and arguments, the Court finds the following facts by a preponderance of the evidence:

The November 18, 1998 Environmental Protection Agency ("EPA") Record of Decision

On November 18, 1998, the EPA issued a Record of Decision selecting certain remedial actions to be performed at the Boarhead Farms site in Upper Black Eddy, Pennsylvania (the "Boarhead Site" or "Site") to address environmental contamination from waste disposal generated by several persons and companies.[3] The EPA agreed that the remedial action described in the Record of Decision could be implemented in two operable units, Operable Unit No. 1 ("OU-1") and Operable Unit No. 2 ("OU-2"). OU-1 would address groundwater extraction and air stripping, installation of additional monitoring wells, the implementation of institutional controls and monitoring for OU-1, and residual water treatment. OU-2 would address excavation and off-site disposal of buried drums, soil treatment of volatile organic compound hot spots, and implementation of institutional controls and monitoring for OU-2.[4]

The July 29, 1999 Agreement in Principle

Cytec Industries, Inc. ("Cytec"), Ford Motor Company ("Ford"), SPS Technologies, LLC ("SPS"), TI Group Automotive Systems, L.L.C. ("TI"), [5]Worthington, and NRM [6] entered into an "Agreement in Principle, " dated July 29, 1999, by which they agreed to: (1) collectively fund and perform OU-1; (2) comply with all the requirements of the OU-1 Consent Decree which Cytec, Ford, and SPS later entered; and (3) pay other OU-1 Group costs.[7] Until the Group costs, or final allocation, was established, the Agreement in Principal provided an interim pay schedule:[8] Cytec, Ford, SPS, and Agere were each obligated to pay 20% per OU-1 assessment, with TI, Worthington, and NRM each obligated to pay 6.67% per OU-1 assessment.[9] Once determined, the final allocation would apply retroactively. Any Agreement-in-Principal party receiving a reduction from the interim allocation to the final allocation would receive credit for any interim payments, with a corresponding debt due from signatories with an increased share.[10]

The OU-1 Group

Having agreed to join the OU-1 funding, NRM, Worthington, and TI formally organized with Cytec, Ford, and SPS to form the "OU-1 Group." Worthington was represented in the OU-1 Group first by Jack Wilmer, Esq., then later by Joseph Lonardo, Esq. of Vorys, Sater, Seymour and Pease, LLP ("Vorys").[11] NRM was represented in the OU-1 Group by Edward Fackenthal, Esq.[12] Worthington's counsel received group e-mails and other updates about the OU-1 Group's activities and participated in OU-1 Group calls and activities on Worthington's behalf.[13] OU-1 Group decisions were made by consensus, [14] and Worthington was made aware of the costs involved with the OU-1 work, the ongoing Site work, the assessments made against Worthington, and the reasons for those assessments.[15]

Timothy J. Bergere, Esq. of Montgomery, McCracken, Walter & Rhoads, LLP, an experienced environmental lawyer who has worked on over fifty Superfund cases, served as Liaison Counsel for many years to the OU-1 and OU-2 Groups with respect to remediation and other activities conducted at the Boarhead Site. Mr. Bergere had primary responsibility for providing legal services relating to the Groups' coordination and remediation efforts, and maintaining and supervising the Groups' finances.[16]

All the remediation contractors performing the work at the Site were retained by the OU-1 Group, not by the Group's individual members.[17]Contractors submitted their invoices to Mr. Bergere for review and approval, and once approved, those invoices were paid from the OU-1 Group trust accounts, never by any OU-1 Group individual member.[18] OU-1 Group assessments replenished the Group's trust accounts, in order to fund upcoming work and cover related costs.[19] The assessments were based upon budget projections prepared by, or on behalf of, the OU-1 Group.[20] The OU-1 Group issued the assessments to its members and the members paid their interim, allocated shares as part of an ongoing program.[21]

The OU-2 Group

Cytec, Ford, SPS, and TI became signatories to a further Administrative Order on Consent for remedial design of OU-2 that became effective October 17, 2001, and a Consent Decree entered in 2002 (the "OU-2 Consent Decree") that obligated them to perform the OU-2 remedial design and action, to reimburse the EPA for past response costs, and to reimburse the EPA for certain future administrative and oversight costs.[22] As to OU-2, Agere agreed with Cytec, Ford, SPS, and TI to ...

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