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ATTORNEYS FOR APPELLANTS Donn H. Wray Justin W. Leverton Indianapolis, Indiana ATTORNEYS FOR AMICUS CURIAE THE INDIANA PETROLEUM MARKETERS AND CONVENIENCE STORE ASSOCIATION George M. Plews Christopher J. Braun Jeffrey D. Featherstun John D. Moriarty Indianapolis, Indiana ATTORNEYS FOR AMICI CURIAE INDIANA ASSOCIATION OF CITIES AND TOWNS AND INDIANA MUNICIPAL LAWYERS' ASSOCIATION Donald M. Snemis Brent H. Huber Freedom S.N. Smith Indianapolis, Indiana

ATTORNEY FOR APPELLEES Rodney E. Farrow Seymour, Indiana ATTORNEYS FOR AMICI CURIAE INSURANCE INSTITUTE OF INDIANA, INC. AND NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES John C. Trimble Richard K. Shoultz Indianapolis, Indiana

FILED
Jun 19 2008, 3:03 pm
of the supreme court, court of appeals and tax court

CLERK

In the

Indiana Supreme Court
_________________________________ No. 36S01-0710-CV-425 RICHARD U. PFLANZ AND DELORES J. PFLANZ, Appellants (Plaintiffs Below), v. MERRILL FOSTER, INDIVIDUALLY, MERRILL FOSTER, D/B/A FRIENDLY FOSTER'S SERVICE, AND SUNOCO, INC. (R&M), Appellees (Defendants Below). _________________________________ Appeal from the Jackson Superior Court, No. 36D01-0412-CT-36 The Honorable Stephen R. Heimann, Special Judge _________________________________ On Petition To Transfer from the Indiana Court of Appeals, No. 36A01-0612-CV-548

_________________________________ June 19, 2008

Shepard, Chief Justice. The question here is whether a property owner's claim for contribution toward environmental cleanup costs is barred by the statute of limitation if the owner should have known about the contamination more than ten years before the complaint was filed. We hold that the statute of limitation does not begin to run until the owner is ordered to cleanup the property, regardless of whether an owner earlier knew or should have known about the need for cleanup.

Facts and Procedural History

Taking all the allegations in the complaint to be true, the facts are as follows. In 1976, Merrill Foster purchased a service station from Sunoco, Inc. and began operating it as Friendly Foster's Service. In 1978, he closed the petroleum dispensing activities and stopped using the underground storage tanks. In April 1984, Richard and Delores Pflanz bought the property from Foster. Prior to the sale, Foster advised the Pflanzes about the presence of the underground tanks, but told them that the tanks were not in use and had been closed. In reality, the tanks remained open and contained some petroleum. The Pflanzes operated a tire store on the property for two years, at which time they sold their business and began leasing the property to a third party.

In 2001, the Pflanzes learned for the first time that there were environmental issues with the property. The Indiana Department of Environmental Management (IDEM) inspected the property and discovered that the underground tanks were leaking. Thereafter, the Pflanzes incurred over $100,000 in cleanup costs, including costs for closing or removing the underground tanks and removing contaminated soil and water.

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On December 30, 2004, the Pflanzes filed a complaint against Foster and Sunoco seeking a determination of liability relating to the environmental contamination, damages under theories of waste, negligence, and stigma, contribution for cleanup costs pursuant to the Underground Storage Tanks Act (USTA), and declaratory relief for future anticipated cleanup costs. See Ind. Code Ann. ch. 13-23-13 (West 2007). Foster moved to dismiss for failure to state a claim upon which relief could be granted, arguing that the complaint was barred by the statute of limitation. The trial court agreed and dismissed.

On March 2, 2006, the Pflanzes filed a second complaint under the same cause number, containing allegations substantially similar to those in the first complaint. On Foster's motion, the court dismissed the second complaint.

The Pflanzes appealed. The Court of Appeals affirmed, reasoning that when Indiana enacted the USTA's contribution statute in 1987 and amended it in 1991, the Pflanzes, in the exercise of reasonable diligence, should have tested the property for contamination such that the statute of limitation began to run no later than 1991. Pflanz v. Foster, 871 N.E.2d 971 (Ind. Ct. App. 2007), vacated. We granted transfer.

I.

Statute of Limitation for Contribution and Declaratory Relief

The parties agree that the general ten-year statute of limitation applies to the Pflanzes' contribution claim. See Ind. Code Ann.

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Indiana Law