Taft lawyers recently convinced the Indiana Court of Appeals to dismiss toxic tort claims in an opinion that clarifies how trespass, nuisance, and negligence claims apply in off-site contamination situations. The decision in KB Home Indiana, Inc. v. Rockville TBD Corp. hinged on the timing of certain ownership interests in the contaminated property.

A home builder sued a former owner of neighboring property (the Site) for contaminating groundwater beneath the builder’s newly constructed subdivision. The contamination occurred years before the subdivision was owned or developed by the builder. Despite the lapse of time between the contamination and the builder’s ownership interest in the subdivision, the builder sued the former owner of the Site for trespass, nuisance, and negligence. The Court of Appeals ruled that the builder could not recover under trespass or nuisance theories and explained how trespass, nuisance, and negligence apply to off-site contamination cases with latent damages.

Trespass – According to the court, a plaintiff must satisfy two elements to recover on a trespass claim: (1) the plaintiff possessed the property when the trespass occurred, and (2) the defendant entered the property without a legal right to do so. Lasting effects of a completed trespass are not enough to support a trespass theory. In KB Home, because the builder did not possess the land when the trespass first occurred, the builder could not recover damages for trespass.

Nuisance – The court also addressed the builder’s nuisance claim. It held that a nuisance claim must involve ongoing and continued offensive behavior. Thus, to pursue a nuisance claim, a plaintiff must prove that a nuisance currently exists or is ongoing. In KB Home, although the builder showed that damage had occurred in the past, the builder failed to show an existing or ongoing nuisance at the Site at the time of its lawsuit. Thus, the Court of Appeals ruled that the builder could not maintain its nuisance claim.

Negligence – Generally, when damage to property has already occurred—and even if a nuisance does not currently exist—a plaintiff may pursue a negligence claim. However, an exception applies where a contract exists between the plaintiff and defendant because the economic loss doctrine precludes negligence liability. Because the builder in KB Home did not have a contractual relationship with the defendant, the court held the defendant could not avoid liability under the economic loss doctrine for a negligence claim.

This decision should comfort owners of industrial/commercial property that has not been actively operated for a number of years.