Seattle Times Co. v. Leathercare, Inc. (337 F. Supp. 3d 999, 2018)

United States District Court for the Western District of Washington 2018-08-15

The Public Health and Welfare

Citations

Full opinion text

Thomas S. Zilly, United States District Judge

THIS MATTER came on for trial on January 9, 2018, before the Court, sitting without a jury. Seattle Times Company ("Seattle Times") was represented by Jeff Kray and Jessica Ferrell of Marten Law PLLC. LeatherCare, Inc. ("LeatherCare"), Steven Ritt, and the marital community composed of Steven Ritt and Laurie Rosen-Ritt were represented by Jo Flannery and Kristin Meier of Ryan, Swanson & Cleveland, PLLC. Touchstone SLU LLC and TB TS/RELP LLC (collectively, "Touchstone") were represented by Jeremy (Jake) Larson of Dorsey & Whitney LLP and Kenneth Lederman of Foster Pepper PLLC.

Trial proceeded for eighteen (18) days and ended on February 7, 2018, at which time the Court took the matter under advisement. Having considered the testimony of the witnesses, the exhibits admitted into evidence, the documents and PowerPoint slides offered for demonstrative purposes, the facts on which the parties have agreed to the extent they are supported by the record, see Pretrial Order (docket no. 154) [hereinafter "PTO"], and the arguments of counsel, the Court now enters these Findings of Fact and Conclusions of Law pursuant to Federal Rule of Civil Procedure 52(a).

Background

A. Introduction

This action concerns the remediation costs associated with hazardous substances, including PCE or Perc and various petroleum products, released on real property bounded by Fairview Avenue North, Thomas Street, Boren Avenue North, and Harrison Street in Seattle, Washington (the "Property"). The Property was contaminated as a result of dry-cleaning and other operations conducted by LeatherCare, which previously leased a portion of the Property, and Troy Laundry Co., which became Troy Linen and Uniform Service, Inc. in 1981 ("Troy"), see Ex. 1150, and which owned the Property. Seattle Times purchased the Property from Troy in 1985, and sold it to Touchstone in 2011. After acquiring the Property, Touchstone redeveloped it into a commercial complex. As part of construction efforts, Touchstone's contractors excavated over 100,000 tons of contaminated soil, which was transported to appropriate waste facilities. In addition, Touchstone had a series of injection wells installed at the Property to address groundwater contamination.

In this action, Touchstone seeks to recover over $9.88 million in connection with its remedial activities. Touchstone has already recovered $4,783,434.17 from Seattle Times pursuant to a contract between the parties, and it seeks the balance of almost $5.1 million from Seattle Times or LeatherCare. Touchstone also requests a judgment declaring the parties' respective responsibilities for future response costs. Seattle Times seeks to recover from LeatherCare and/or Mr. Ritt, the current President of LeatherCare, see Ritt Decl. at ¶ 2 (docket no. 61), substantially all of what it has paid, or will be liable to pay, to Touchstone. LeatherCare and Mr. Ritt ask for declaratory relief, as well as contribution, contending that Mr. Ritt cannot be held personally liable and that the Court should equitably apportion the expenses at issue among all of the parties. Seattle Times asserts its claims against LeatherCare and Mr. Ritt under both federal and state statutes relating to environmental cleanup, while Touchstone relies solely on state law.

1. The Property

The Property consists of two tax parcels, covering approximately 2.5 acres of land, in a neighborhood of Seattle just south of Lake Union, as shown on the following map.

Troy acquired a portion of the Property in 1925, and owned the entire block by 1951. When Seattle Times purchased the Property from Troy in 1985, the Property had three improvements, as shown in Figures 2 and 3, namely a vintage warehouse built in 1925, located at 334 Boren Avenue North (Building 1), a vintage industrial facility constructed by 1927 and expanded between 1943 and 1966, bearing an address of 307-311 Fairview Avenue North (Building 2), and a vintage structure erected in 1960, designated as 333 Fairview Avenue North (Building 3). Ex. 107 at 10-11; Ex. 115 at 147-58.

Troy operated in Building 2 both an industrial laundry and a dry-cleaning plant. Troy also fueled and serviced its fleet of vehicles at the Property. In 1957, LeatherCare's predecessor, Seattle Fur Services, began leasing a portion of Building 2 from Troy. In 1981, LeatherCare also became a tenant of Building 3. LeatherCare continued to lease from Troy until March 5, 1985, when Troy sold the Property to Seattle Times for $3.5 million. From March until September 1985, LeatherCare leased space in Building 2 from Seattle Times, and LeatherCare occupied Building 3 until 1999. See infra p. 1027-28. On June 10, 2011, Seattle Times sold the Property to Touchstone for $18.4 million. As a result of Touchstone's redevelopment efforts, the Property is now occupied by a two-building complex with a five-story, underground parking garage. Figure 4 shows the new office space in the final stages of construction.

2. The Hazardous Substances

This matter involves two types of hazardous substances, namely (i) halogenated hydrocarbons, and (ii) petroleum products.

a. Halogenated Hydrocarbons

PCE or Perc, which is a halogenated hydrocarbon, is a synthetic chemical that is not known to occur in nature. See Tab 11 to Dale Report (docket no. 183-13 at 19 & 22). During the period when LeatherCare leased Buildings 2 and 3 from Troy, PCE was commonly used as a solvent in the dry-cleaning industry, and it was the dominant synthetic solvent. See Dale Report, Ex. 210 at 2 (filed as docket no. 118-1). Because of its tendency to transition from a liquid to a gaseous state at normal temperatures, PCE is considered a volatile organic compound ("VOC"). See Tab 11 to Dale Report (docket no. 183-13 at 41 & 47). PCE is also described as a dense non-aqueous phase liquid ("DNAPL"), meaning that it has a higher specific gravity (i.e. , it is heavier) than water, and that it will separate from water, in a manner similar to how oil and vinegar, or the fat and juice of roasted meat drippings, will settle into different layers. See id. (docket no. 183-13 at 40-41).

PCE can degrade into trichloroethylene or trichloroethene ("TCE"), as well as other compounds, including vinyl chloride (C2 H3 Cl). Chronic inhalation exposure to these substances can lead to neurological disorders, kidney or liver disease, and/or reproductive dysfunction. See PCE Fact Sheet, Ex. 457; see also Toxicological Profiles (available at www.atsdr.cdc.gov). The United States Environmental Protection Agency ("EPA") has classified PCE as "likely to be carcinogenic" and both TCE and vinyl chloride as "carcinogenic to humans."

See https://www.epa.gov/fera/risk-assessment-carcinogenic-effects (Table 1). In addition to being a degradation product of PCE, TCE is frequently an original component of water and stain repellants, vehicle brake part and carburetor cleaners, sizing materials, spotting and degreasing agents, lubricants, battery terminal protectants, and printing inks like those used by Seattle Times. Morrill Report at §§ 4.2.1.2.1 & 4.8 and App'x J, Ex. 1141 (filed as docket nos. 117-1 & 117-13); see also https://www.epa.gov/sites/production/files/2015-01/documents/printing.pdf.

The Washington Department of Ecology ("Ecology") has established "cleanup" levels for certain chlorinated hydrocarbons, which are the concentrations "in soil, water, air, or sediment" that are "determined to be protective of human health and the environment under specified exposure conditions." WAC 173-340-200. The "cleanup" concentrations relevant in this litigation are as follows:

Substance In Soil In Groundwater PCE 0.05 mg/kg 5 µg/liter TCE 0.03 mg/kg 5 µg/liter Vinyl Chloride N/A 0.2 µg/liter

WAC 173-340-900 at Tables 720-1, 740-1, & 745-1.

b. Petroleum Products

Other contaminants of concern at the Property were Stoddard solvent, gasoline, and diesel fuel. Like PCE, Stoddard solvent was once a popular compound in the dry-cleaning industry. Stoddard solvent is a flammable, volatile liquid, which is insoluble in water and smells similar to kerosene or gasoline. It is not generally regarded as carcinogenic, but very few studies have been done on the effects in humans of inhalation exposure to Stoddard solvent. See Toxicological Profile for Stoddard Solvent (June 1995), Ex. 452 at 23. Stoddard solvent is considered a gasoline-range petroleum hydrocarbon ("GRPH"). At the Property, Stoddard solvent was stored in underground tanks. Gasoline for use in Troy's fleet of vehicles and diesel fuel for use presumably as heating oil were also stored underground. Ecology has set a "cleanup" level for GRPH of 100 mg per kg of soil. See WAC 173-340-900 at Tables 740-1 & 745-1.

3. PCE Emissions from Dry-Cleaning Operations

In this matter, the parties have stipulated that, as a result of dry-cleaning operations, PCE was released into the subsurface soil and migrated to the groundwater beneath the Property. See Stip. & Order at ¶ 2 (docket no. 41); Stip. & Order at ¶ 2 (docket no. 52). The parties also agree that the contamination occurred primarily in two ways. First, it resulted from placing PCE-saturated materials in the back of a dump truck, which was owned and used by Troy to haul waste to a transfer station, and which was left, uncovered at times, in the partially-unpaved loading dock, thereby allowing rain water to soak through the rubbish and solvent to infiltrate the soil. See PTO at 10, ¶ 22. Second, PCE was discharged into the subsurface soil because of degradation of the drainpipes and side sewers that carried effluent water commingled with solvent to the municipal sewer main running under Boren Avenue North. See PTO at 8-9, ¶¶ 13 & 19; see also Kransnoff Report at Op. 1, Ex. 213 at 5-13; Morrill's Rebuttal & Supp. Report at Gen. Op. 4, Ex. 1145 at 21-22 (filed as docket no. 117-15) (opining that the drain and sewer lines at the Property were corroded before LeatherCare began using PCE in its operations). The parties dispute, however, the extent to which Troy, along with LeatherCare, is responsible for the PCE contamination at the Property, and whether Troy, in addition to LeatherCare, ran a PCE-based dry-cleaning plant at the Property.

a. Components of a Dry-Cleaning System

To fully comprehend the parties' stipulations concerning how PCE was released at the Property, knowledge about dry-cleaning operations is required. The term "dry cleaning" is a misnomer because the clothes still get wet during the process; however, they are immersed in a liquid other than water. Whether the liquid is PCE, Stoddard, or another non-aqueous solvent, the principal steps are identical to those of laundering in water: (i) one or more washes (baths) in the solvent; (ii) extraction of the solvent by spinning; and (iii) drying by tumbling in an air stream. Ex. 270 at 14 (filed as Tab 48 to Dale Report, docket no. 183-50). The washing and drying components of a typical dry-cleaning system are shown in yellow in Figure 5.

Because PCE is both expensive and toxic, PCE systems include additional equipment designed to capture and reuse the solvent. As illustrated in Figure 5, a basic PCE system has the following extra components (tinted in red): (i) a filter to separate particulates from the used solvent; (ii) a distillation unit (or still), which heats the recycled PCE to vaporize it; (iii) a condenser, which cools the purified gas and converts it to liquid form; and (iv) a separator to divide from the reclaimed PCE any water that has entered the system. See id. at 16 (Fig. 2-1); see also Dale Report, Ex. 210 at 3-4; cf. Morrill Rebuttal & Supp. Report at Fig. 3-1, Ex. 1145 at 19 (filed as docket no. 117-15) (indicating that an operation using Stoddard solvent would likewise have, in addition to a washer/extractor and dryer, a filter, still, condenser, and separator); Ex. 392 at 17 (Fig. 2-1) (filed as Tab 72 to Krasnoff Report, docket no. 189-20). A PCE plant with emission control would also have a carbon adsorber, sometimes called a sniffer, along with an additional condenser and another separator, to collect solvent fumes from the air. See Ex. 270 at 16-17; see also Ex. 210 at 3 (Fig. 1). These extra, emission-control elements are highlighted in green in Figure 5.

The parties agree that LeatherCare's PCE dry-cleaning system had reclamation elements (filter, still, condenser, and separator), as well as emission-control components (adsorber and additional condenser and separator). See PTO at 9, ¶ 18. For the reasons discussed later, the Court finds that Troy also operated a PCE dry-cleaning plant at the Property, and that Troy's facility was equipped with a reclamation unit, but had no emission control. See infra pp. 1019-21. PCE-reclamation and emission-control devices generate waste in two forms: (i) PCE-laden solid materials, like filter muck, filter cartridges, and still residue, that was, in connection with Troy's and LeatherCare's operations, deposited into the dump truck parked in the loading dock, and (ii) PCE-contaminated waste water, which in this matter ran through the side sewers before leaving the Property. The parties have offered disparate views concerning the quantity of PCE released at the Property via its disposal with solid waste and/or waste water.

b. Quantifying PCE Releases

In its 1978 report, a copy of which was admitted as Exhibit 270, the EPA provided estimates concerning typical PCE emissions from dry-cleaning facilities. The amount of PCE lost each year depends on the quantity of PCE used annually, which correlates with the size of the dry-cleaning operation. For purposes of its study, the EPA defined three types of dry-cleaning facilities: (i) independent or franchise stores offering coin-operated, self-service systems, which processed roughly 7,200 kg (16,000 lbs) of clothes per year; (ii) "commercial" operations, including neighborhood shops and specialty cleaners handling leather and other fine goods, which would each handle about 23,000 kg (60,000 lbs) of clothes per year; and (iii) "industrial" plants involved in supplying uniforms or other items to commercial customers, which would typically clean 240,000 to 700,000 kg (600,000 to 1,500,000 lbs) of clothes per year. Ex. 270 at 13. The parties agree that LeatherCare's PCE-based system at the Property was a "commercial" dry cleaner. As explained later, see infra p. 1021, the Court finds that Troy's PCE dry-cleaning operation was also "commercial" in scope.

When the EPA issued its report in 1978, the typical "commercial" PCE plant had a 14-27 kg (30-60 lb) capacity washer/extractor and an equivalent-sized dryer (reclaiming tumbler). Ex. 270 at 17. Surveys conducted in the mid-1970s revealed that only 35-to-50% of "commercial" dry cleaners had carbon adsorbers (sniffers). Id. According to the EPA, a well-operated PCE system without a sniffer (like Troy's) was estimated to lose, through various emissions, between 8 and 21 kg of solvent per 100 kg of clothing laundered, while an adsorber-equipped plant (like LeatherCare's) was believed to experience less than 5 kg of solvent loss per 100 kg of clothing laundered. Id. at 18-19. The EPA identified the following primary mechanisms of PCE loss: (i) evaporation at the washer and dryer, which is minimal if a sniffer is employed; (ii) retention in the filter muck, which can be reduced by cooking the muck to reclaim the solvent; (iii) retention in filter cartridges, which can be reduced by drying them in a cabinet vented to an adsorber; (iv) retention in the still residue; and (v) leaks from pumps, valves, flanges, seals, and storage vessels. Id. at 17-18.

The EPA also recognized that carbon adsorbers and muck cookers are not perfect emission-control technologies. PCE vapor would still be released through a sniffer's exhaust, but at an estimated rate of only 0.3 kg per 100 kg of clothing laundered (as compared to evaporation losses without an adsorber of 4-to-7 kg per 100 kg of clothes in the aggregate at the washer/extractor and dryer). Id. at 18. A filter muck cooker could substantially reduce PCE loss, but not below 1 kg per 100 kg of clothing laundered. See id. Thus, even with the then state-of-the-art control technologies, a "commercial" dry cleaner operating during the timeframe at issue in this case could expect to lose about 1,150 kg (194.6 gal) of PCE per year through (i) disposal of filter muck, filter cartridges, and still residue, (ii) adsorber exhaust, and (iii) various leaks. In addition, both carbon adsorbers and muck cookers increase the amount of water that comes in contact with PCE, which results in solvent being discharged along with effluent water to the sewer system. See id. at 48-51. Based on a figure of 100 ppm of PCE in effluent water, the EPA predicted that "commercial" dry cleaners using sniffers and muck cookers would dispose of at least 1.4 kg (0.24 gal) of PCE per year with their waste water, and that "industrial" dry cleaners with similar equipment would lose 13.4 kg (2.3 gal) of PCE per year down the sewer. Id. at 50-51.

Seattle Times contends that LeatherCare experienced much higher losses of PCE than was estimated by the EPA to be typical for "commercial" dry cleaners, relying on the opinion of its expert Bruce E. Dale, Ph.D. Dr. Dale's calculations depended on the assumption that, to replace the PCE lost during dry-cleaning operations, LeatherCare purchased 1,977 gallons of PCE per year; Dr. Dale rounded this figure up to 2,000 gallons of PCE per year. Ex. 210 at 8 & 12 (filed as docket no. 118-1). Of those 2,000 gallons of PCE lost per year, Dr. Dale believes that 30% (600 gallons of PCE per year) was released to the sewer, while the remaining 70% (1,400 gallons of PCE per year) was discharged with filter muck, filter cartridges, and still bottoms. Id. at 12.

Dr. Dale's numbers are inconsistent with those of Bernard Tod Delaney, Ph.D., P.E., BCEE, another expert retained by Seattle Times, but in the related insurance coverage dispute, Seattle Times Co. v. Nat'l Sur. Corp. , W.D. Wash. Case No. C13-1463 TSZ. The experts in this case discussed Dr. Delaney's opinions in the other case, and his report was admitted into evidence as Exhibit 1140. The Court concludes that Dr. Dale's analysis is flawed because it ignores the amount of PCE released to the air. The Court further observes that Dr. Delaney's estimates are substantially similar to those of LeatherCare's expert, Pamela J. Morrill, L.G., L.H.G., and to the ratios contained in an EPA report issued in June 1998, see EPA 744-B-98-001 at Ex. 10-9 (filed as App'x A to Morrill Rebuttal & Supp. Report (docket no. 117-16 at 826) ); see also Ex. 1145 at 35 (Table 4-6) (filed as docket no. 117-15). The following table compares the various estimates concerning the relative amounts and mechanisms of PCE loss:

Dale Delaney Morrill EPA Gallons of PCE Lost Per Year 1,977 1,977 1,681 469 Lost in Filter Muck, Filter Cartridges, and Still Bottoms 70% 25-27% 17.4% 27% Lost in Waste Water 30% <1% <1% <1% Lost to Air 0% 73-74% 82.55% 72.9%

B. Troy Linen and Uniform Service, Inc. f/k/a Troy Laundry Co.

To resolve the parties' disputes concerning the extent to which Troy is responsible for the PCE contamination at the Property and whether Troy, in addition to LeatherCare, operated PCE-based equipment at the Property, Troy's history and the nature of its use of the Property must be understood.

1. Troy's Development of the Property

When Troy began to acquire the Property in 1925, it was already developed with perhaps as many as fifteen (15) residences. Ex. 107 at 15; Ex. 115 (493) at 21. In 1926 and 1927, Troy constructed a laundry facility on the southeast portion of the Property. Ex. 107 at 16. Between 1943 and 1948, Troy expanded, creating areas to either the west or north of the original plant, including a "fur vault," which was later used by LeatherCare. Id. at 6 & 16; see Ex. 115 (493) at 22 (stating that, in 1945, Troy purchased the lot eventually occupied by the fur vault); see also Ex. 115 at 217-18. The fur vault, which was assigned an address of 312 Boren Avenue North, opened for business in April 1948, and it was used by Glacier Fur Co., Troy Fur Company, and North Star Fur Company, before it was leased to Seattle Fur Services, LeatherCare's predecessor. See Ex. 115 (493) at 23; see also Ex. 115 at 161 & 214-15. In 1949, Troy bought the northeast quadrant of the Property. Ex. 115 (493) at 23. Troy rented out the remaining dwellings, see Ross Dep. (Vol. 1) at 96:22-97:4 (docket no. 226), until they were demolished between 1957 and 1960, at which time Building 3 was erected, see Ex. 107 at 16; Ex. 115 (493) at 23; see also Ex. 115 at 182-83. King County Assessor records indicate that, in December 1951, Troy acquired the northwest parcel associated with Building 1. See Ex. 115 at 192-93 & 196-200.

In 1964, Troy commenced work on a new two-story structure, in the southwest segment of the Property, which had a parking garage designed to accommodate Troy's fleet of vehicles. To make room for this 1964 addition, Troy removed a concrete laundry-loading shed with a ramp that had been built in 1950, and vacated the southern portion of an alley that ran through the Property, parallel to Boren and Fairview Avenues, and that had been in existence since at least 1893. See Ex. 107 at 16; see also Ex. 115 (493) at 23-24. In 1966, more space was added to the northeast of the existing plant. Ex. 107 at 16; Ex. 115 (493) at 24. Together, Troy's original laundry facility, the four structures built between 1943 and 1948, including the fur vault, and the 1964 and 1966 additions formed what has been designated as Building 2.

The configuration of Buildings 1, 2, and 3 remained generally unchanged from 1966 until 2011, when the Property was purchased by Touchstone. See Ex. 107 at 16. In 1970, City Dry Cleaners Company bought Building 3 for $123,840. See Ex. 115 (493) at 25; Ex. 115 at 183; Ex. 188. City Dry Cleaners Company had previously been associated with Troy, but whether it still was, as of the date it purchased Building 3, cannot be determined from the record before the Court. In 1996, Building 2 was designated as a Historical Landmark by the City of Seattle Landmarks Preservation Board. Ex. 107 at 165-90; Ex. 115 (493) at 26. Figure 6 illustrates the progression of improvements on the Property.

2. Troy's Operations on the Property

a. Industrial Laundry

From 1927 until 1985, Troy operated an industrial laundry at the Property, in Building 2. See PTO at 7, ¶¶ 9 & 12. The parties have stipulated that Troy's industrial laundry facility used approximately 150,000 gallons of water per day, which it drew from an on-site well. PTO at 9, ¶ 17; see also Ex. 115 (493) at 25 (indicating that, in 1971, Troy obtained a permit to appropriate up to 1,000 gallons of water per minute from the supply well). Troy's industrial laundry cleaned linens, like napkins and table cloths, for hotels, restaurants, and other industrial clients. PTO at 9, ¶ 17.

b. "Industrial" Dry-Cleaning (Stoddard)

After the 1964 addition was completed in 1965, Troy also ran an "industrial" dry-cleaning plant at the Property, which used Stoddard solvent to launder uniforms and other items for various businesses. See id. at 8, ¶¶ 14 & 15. According to Jack Ross, who worked for Troy from 1963 until 1984, see Ross Dep. (Vol. 1) at 15:18 (docket no. 226), and became its Chief Engineer in the mid-1970s, id. at 43:2-5, Troy had two 400-pound Stoddard machines, through which it would process at least 6,000 pounds of clothing (roughly eight loads per machine) each day, five days per week, id. at 59:3-7, 59:14-15, & 60:10-15. These figures indicate that, from 1965 until 1985, Troy's Stoddard equipment handled roughly 1.5 million pounds of clothing each year, which is consistent with the EPA's 1978 estimate concerning the quantum of work typically performed by "industrial" dry cleaners. See supra p. 1015.

c. "Commercial" Dry-Cleaning (PCE)

Mr. Ross further testified that, between 1965 and about 1972, Troy also operated a PCE-based dry-cleaning system for retail customers. During that timeframe, Troy would send its vans to residences to pick up items to be dry cleaned and then deliver them after processing. Ross Dep. (Vol. 1) at 17:2-8. This part of Troy's business was called the "family laundry service" or the "family routes." See id. at 27:24-28:3. Troy also received clothing to be dry cleaned at a call center on the Property (in Building 3). Ross Dep. (Vol. 2) at 243:4-16 & 252:14-22 (docket no. 227). Mr. Ross recollected that Troy's PCE machines, namely a 30-pound washer, a 60-pound washer, and one or more dryers, had been at Troy's facility known as City Laundry, and that the PCE equipment was moved to the Property when the 1964 addition was finished. Ross Dep. (Vol. 1) at 19:1-22, 22:17-25, & 24:9-20; Ross Dep. (Vol. 2) at 210:9-24 & 214:4-11.

After the PCE system was relocated to the Property and other consolidation efforts were accomplished, Troy closed both the City Laundry facility and a linen-supply plant in Ballard. See Ross Dep. (Vol. 1) at 24:23-25:9. At its peak, Troy's family laundry service had approximately 20 routes, involving about 25 vans. Id. at 32:16-33:3. In the early 1970s, Troy sold the city routes and reduced its retail business. Id. at 47:13-14. Sometime between 1970 and 1974, Troy ceased its PCE operations. Id. at 27:18-23; see Ross Dep. (Vol. 2) at 165:11-15, 243:13-19, & 244:9-20. According to Mr. Ross, LeatherCare subsequently installed new PCE machines in the same area of Building 2 where Troy's PCE equipment had been located. Ross Dep. (Vol. 1) at 28:11-29:6 & 114:21-25; see also Exs. 65 & 1009.

Seattle Times and Touchstone challenge Mr. Ross's credibility. The Court, however, finds that Mr. Ross's memory was reliable and that his testimony was not controverted. Although Steven Ritt and Mark Chose did not believe that Troy ever had PCE equipment at the Property, neither of them worked at the facility during the time when Troy was engaged in a retail dry-cleaning business; Mr. Ritt was employed elsewhere from 1967 until 1974, Ritt Dep. (Aug. 5, 2015) at 19:13-18 (docket no. 141), and Mr. Chose did not start working for Troy until 1972, Chose Dep. at 8:22-23 (docket no. 225). As Chief Engineer for Troy, Mr. Ross had more opportunity and incentive to understand the nature of Troy's dry-cleaning operations; Mr. Ritt was concerned with LeatherCare's operations, not Troy's, while Mr. Chose's primary role at Troy related to the maintenance of its fleet of vehicles, see id. at 11:22-12:23, 13:3-18, 53:22-54:2, 62:22-63:17.

Moreover, Mr. Ross's explanation that Troy moved its PCE-based "family routes" operation to the Property from City Laundry as part of a consolidation plan is supported by other evidence in the record. A 1950 Certified Sanborn Map shows that City Dye Works Co. Inc. (which Mr. Ross called "City Laundry") was located at the corner of Fifth Avenue North and John Street, but a 1969 Certified Sanborn Map indicates that the same building was, by that time, vacant, see Ex. 186, lending credence to Mr. Ross's testimony that the business had been relocated and the premises had been abandoned in 1965. The accuracy of Mr. Ross's memory is further substantiated by an advertisement that appeared in the Seattle Times in July 1946, touting the services of City Dry Cleaners, which would pick up, clean, press, and deliver men's suits "all for $1.00." Ex. 185.

Mr. Ross's description of Troy's PCE system was also consistent with the EPA's later observations in 1978 concerning the typical "commercial" dry-cleaning plant, which was likely to have a 30-to-60 pound per load capacity and no emission control. See supra p. 1015. In addition, the two plumes of PCE-contaminated soil that were discovered during Touchstone's redevelopment efforts, in an area used exclusively by Troy, corroborate Mr. Ross's representations that Troy used PCE in its operations.

Having viewed a portion of the video recording of Mr. Ross's deposition, and having read the entire transcript of his testimony, the Court finds that Mr. Ross was a credible witness with no motive to fabricate information or obfuscate the facts. The Court finds that, for five to seven years after the 1964 addition was built, Troy had a PCE plant with throughputs (and PCE losses) comparable to those of the average "commercial" dry-cleaning facility (without emission control) as defined by the EPA in 1978, i.e. , handling approximately 23,000 kg (60,000 lbs) of clothes per year and losing between 8 and 21 kg of PCE per 100 kg of clothing laundered. See supra p. 1015.

3. Troy's Underground Storage Tanks

During its tenure as owner of the Property, Troy installed and/or maintained at least 18 underground storage tanks ("USTs"). PTO at 8, ¶ 16. As indicated in Figure 7, on the next page, the various USTs included:

• four USTs of 8,000-gallon, 3,000-gallon, 1,000-gallon, and 350-gallon capacities, respectively, located near or under the 1964 addition, the first three of which contained Stoddard solvent, and the last of which held "Sta Dri," a spotting agent containing PCE; see Ex. 115 (493) at 25 & 77 (Fig. 3); Morrill Report, Ex. 1141 at 35-36 & 645-46 (App'x J) (filed as docket nos. 117-1 & 117-13);

• one 7-barrel (~ 300-gallon) UST containing heating oil, which was located approximately 110 feet south of Harrison Street and under the Boren Avenue North right-of-way; Ex. 115 (493) at 23 & 26; two 12,000-gallon USTs and one 1,000-gallon UST containing heating oil, which were located under a parking lot north of the boiler room in Building 2; Ex. 115 (493) at 25;

• one 550-gallon UST, labeled as UST # 1 by Touchstone's consultant, which was discovered under the approximate location of the 1943 addition, and which was associated with petroleum-contaminated soil; Ex. 126 (458 & 491) at § 5.11.1.1; Ex. 126 (491) at Fig. 14;

• four 2,000-gallon USTs containing gasoline, located near or under the 1966 addition, three of which were unearthed during Touchstone's redevelopment efforts and denominated as USTs # 2, # 3, and # 4; the fourth UST was not found during excavation and might have been removed when the 1966 addition was constructed; Ex. 126 (458 & 491) at § 5.11.1.3; Ex. 107 at Fig. 2; see Ex. 115 (493) at 24;

• a 750-gallon UST, identified by Touchstone's consultant as UST # 5, which was uncovered in the soil under the east side of the 1964 addition, and which was empty and in good condition with no visible holes or pitting; no further assessment was conducted; Ex. 126 (458 & 491) at § 5.11.1.4; Ex. 126 (491) at Fig. 14;

• one 8,000-gallon UST containing gasoline, which was located under the parking lot adjacent to Building 3; Ex. 115 (493) at 25; and

• one 10,000-gallon UST of unknown content and location, which was listed in tax records as an improvement for Building 3; Ex. 115 (493) at 24.

By 1985 or 1986, shortly after it purchased the Property from Troy, Seattle Times learned of some, but not all, of the USTs, and it removed the 8,000-gallon Stoddard tank, which was under the driveway to the loading dock and therefore easily accessible. See Ex. 103 at 4 & 10-11. In contrast, the 3,000 and 1,000-gallon USTs containing Stoddard solvent, as well as the 350-gallon "Sta Dri" tank, were emptied, tested with air for leaks (using three pounds-force per square inch (3 psi) for ½ hour), filled with sand, and left in place. Id. at 4-5 & 10. Seattle Times was also aware of the three USTs north of the boiler room that had been used to store heating or fuel oil (with 12,000 or 1,000-gallon capacities) and of the 8,000-gallon gasoline tank associated with Building 3, but it took no steps at that time to remove those USTs, indicating that it would "determine whether likely future use of the building makes it worthwhile to retain them." Id. at 11.

In 1988, during the course of a telephone-line installation, the 7-barrel heating-oil UST was discovered under the Boren Avenue North right-of-way, and Seattle Times obtained a permit to allow the tank to remain in place. Ex. 115 (493) at 26. When that same UST was opened in 2010, it contained approximately one inch of heating oil, floating on about one foot of water. Ex. 107 at 21. The 8,000-gallon UST containing leaded gasoline was apparently closed in place in 1996. Ex. 115 (493) at 26. During the course of excavation related to Touchstone's redevelopment efforts, three distinct plumes of petroleum-contaminated soil were discovered, one on the west side of the Property, near the latitude of the 7-barrel heating oil UST (Plume 1), one in the southwest quadrant of the Property, under the footprint of the 1964 addition, which was also contaminated with PCE (Plume 2), and one in the northern portion of the property, in the vicinity of the decommissioned 8,000-gallon UST that had housed gasoline (Plume 3).

Figure 8, on the next page, shows the three plumes of petroleum-contaminated soil. Although Seattle Times and Touchstone have asserted to the contrary, the Court finds that the plume of petroleum-only contaminated soil ("PCS") in the northern section of the Property (Plume 3) was not caused by LeatherCare's operations at the site. Troy undisputedly installed, maintained, and used the 8,000-gallon gasoline tank under the parking lot of Building 3, and no evidence has been offered that LeatherCare fueled its vehicles from or was otherwise associated with the UST that was the source of Plume 3, consisting solely of gasoline-range petroleum hydrocarbon.

4. Troy's Acquisition and Dissolution

On March 1, 1985, American Linen Supply Co., a Washington corporation, d/b/a Maryatt Industries ("Maryatt"), acquired all of the issued and outstanding stock of Troy, and Troy became a wholly-owned subsidiary of Maryatt. PTO at 7, ¶ 8; see Ex. 41. Troy began winding up its operations in 1985, shortly after the sale of the Property to the Seattle Times. PTO at 11, ¶ 27. Troy was dissolved on March 14, 1986. Id. at 7, ¶ 8; see Ex. 1152. The limitation period for commencing any action against Troy or its directors, officers, or shareholders expired on March 14, 1988. See RCW 23B.14.340 ; see also La.- Pac. Corp. v. ASARCO, Inc. , 5 F.3d 431 (9th Cir. 1993).

The Court concludes that, with respect to any liability on Troy's part, the "orphan share" doctrine applies. See, e.g., United States v. Kramer , 953 F.Supp. 592, 595 (D.N.J. 1997) (the inability "to assign an ideal measure of monetary responsibility to an otherwise responsible party" gives rise to an "orphan share"). Under the "orphan share" doctrine, the liability attributable to a party who "is insolvent, cannot be located, or cannot be identified" is apportioned among the "available, solvent, and responsible parties." See Lyondell Chem. Co. v. Occidental Chem. Corp. , 608 F.3d 284, 303 (5th Cir. 2010) ; see also PCS Nitrogen Inc. v. Ashley II of Charleston LLC , 714 F.3d 161, 168 n.1 (4th Cir. 2013). The doctrine is equitable in nature, and the Court exercises its discretion in this matter to allocate Troy's orphan share among the parties to the litigation, namely LeatherCare, Seattle Times, and Touchstone. To perform an equitable apportionment, the Court must consider each party's activities on or with respect to the Property.

C. Seattle Fur Services and LeatherCare, Inc.

Seattle Fur Services was a business initially run by Steven Ritt's parents, Al and Rhea Ritt, that provided wholesale fur-cleaning and storage services to retail stores in the Seattle area. Ritt Dep. (Aug. 5, 2015) at 8:14-22 & 20:18-23 (docket nos. 141 & 228). When Seattle Fur Services began leasing from Troy in 1957, it operated solely in the area of Building 2 known as the fur vault. See PTO at 7, ¶ 10. After LeatherCare was incorporated in April 1960, see Ex. 1, the company continued operating as Seattle Fur Services, and it also starting using the brands PillowCare, FabriCare, and Certified Restoration Dry Cleaning Network, see Ritt Dep. (Aug. 5, 2015) at 12:1-25 & 20:8-12. Under the LeatherCare name, the business offers wholesale leather and suede cleaning to dry cleaners throughout Washington and Oregon. Id. at 21:5-7.

Beginning in 1965, after the 1964 addition was completed, LeatherCare began using the excess capacity of Troy's Stoddard-based dry-cleaning equipment. PTO at 8, ¶ 15. A finishing area on the west end of the 1964 addition was also made available for LeatherCare's exclusive use. Id. In March 1972, LeatherCare and Troy entered into a written lease pursuant to which LeatherCare was provided non-exclusive use of the dry-cleaning room, which at that time contained inter alia two 85-pound washers, as well as drying equipment. Exs. 91 & 1153. Pursuant to the lease, Troy would furnish Stoddard solvent, machines, electricity, and all other utilities needed by LeatherCare in the conduct of its business. Id.

In August 1979, LeatherCare purchased new PCE-based dry-cleaning equipment and installed it in the 1964 addition, to the west of the Stoddard dry-cleaning area and near the loading dock. See PTO at 9, ¶ 18. The new PCE system included two Marvel washing machines, five Hoyt reclaimers (Solv-O-Misers), a Hoyt sniffer (Sniff-O-Miser), and a still. Id. In 1980, LeatherCare purchased another Hoyt reclaimer. Id. In Figure 9, the Stoddard dry-cleaning area can be seen on the right, and the PCE dry-cleaning area is shown on the left; the markings in red (within the PCE Operations area) were made by Mr. Ross to illustrate where Troy's PCE equipment had been before LeatherCare installed its PCE machines in roughly the same location. See Ross Dep. (Vol. 2) at 239:12-240:9 & Ex. 20A (docket no. 227). LeatherCare conducted PCE operations at the Property from August 1979 until July 1985. PTO at 9, ¶ 18. After setting up its PCE plant, LeatherCare ceased using the excess capacity of Troy's Stoddard equipment. See Ritt Dep. (Aug. 5, 2015) at 120:21-24 & 138:12-14 (docket no. 141).

As was recommended in the EPA's 1978 report, Ex. 270, LeatherCare drained its filter cartridges and dried them in its reclaimers to recover as much PCE as possible before disposing of them. See PTO at 9-10, ¶ 21. LeatherCare disposed of the spent filter cartridges, as well as the still bottoms or muck, in the back of the dump truck provided for such purpose by Troy, into which Troy also placed its waste. Id. at 10, ¶¶ 22 & 23. Troy (and specifically, Mark Chose) drove the dump truck to a transfer station when needed. Id. at 10, ¶ 22; see also Chose Dep. at 37:9-16 & 38:3-12 (docket no. 225). Troy provided this garbage service, as well as other utilities, to LeatherCare under the terms of the parties' lease. PTO at 10, ¶ 22.

In 1981, Troy and LeatherCare negotiated a new lease. See Ex. 92. The new lease described the portion of the 1964 addition that was occupied by LeatherCare as "Parcel A," the fur vault as "Parcel B," and Building 3 or the "call office" as "Parcel C." Id. at ¶ 1. Parcel A was to be used for conducting a wholesale leather cleaning and restoration business, Parcel B was to be used exclusively for fur cleaning, storage, restyling, and repair, and Parcel C was to be used in connection with retail laundry and dry-cleaning operations. Id. at ¶ 2; see also Ritt Dep. (Aug. 5, 2015) at 43:9-44:3 (docket no. 141) (indicating that garments brought by customers to the call office were cleaned elsewhere and that Building 3 had no laundering equipment).

With respect to Parcel C, LeatherCare was assigned ten abutting customer parking spaces and allowed to use the associated neon sign. Ex. 92 at ¶ 1(c). Troy, however, retained for its exclusive use the propane tank, gasoline pump and tank, and certain other parking stalls near Building 3. Id. The lease specified the utilities for which LeatherCare was responsible, namely telephone, water associated with the fur vault, city license fees for the neon sign, natural gas for the call office, and steam for any on-premises call-office (retail) dry-cleaning. Id. at ¶ 14. Troy was required to furnish steam, electricity, and all other utilities needed by LeatherCare to conduct its business in Parcels A, B, and C. Id. Troy also had an obligation to maintain in good condition the outer walls, the roof, the foundation, and all structural members. Id. at ¶ 5. The lease had a term of three years, which ended on April 30, 1984. Id. at ¶ 3.

Effective May 1, 1984, Troy and LeatherCare executed another lease. Ex. 93. The 1984 lease contained terms similar to the 1981 lease, except that the term was for only one year, to end on April 30, 1985. Id. at ¶ 3. Like the 1981 lease, the 1984 lease allowed LeatherCare, with Troy's (or its successors' or assigns') consent, to "hold over" after the expiration of the lease term on a month-to-month tenancy under the "terms, covenants, and conditions" set forth in the lease. Id. at ¶¶ 24 & 25. When it purchased the Property from Troy, Seattle Times took title free of encumbrances except for the 1984 lease with LeatherCare (and a separate, unrelated lease concerning Building 1). Ex. 1035 at ¶ 1. By September 1985, LeatherCare had vacated Parcels A and B, but was still occupying Parcel C. Ex. 94. LeatherCare continued to rent Parcel C from Seattle Times on a month-to-month basis for some period, id. ; the record does not reflect the exact date when the tenancy ended, but it appears to have continued into 1999, as reflected in a letter from Mr. Ritt dated November 3, 1998, complaining about a rent increase. Ex. 1179.

D. Seattle Times Company

Since 1895, Seattle Times has been in the newspaper business. PTO at 6, ¶ 4. For at least 80 years, Seattle Times conducted operations just south of the Property, in the adjacent block bounded by Fairview Avenue North, John Street, Boren Avenue North, and Thomas Street (the "1120 John Block"), acquiring the real estate in segments over time. See Ex. 115 (493) at 18 & 30-31. Seattle Times is well-acquainted with petroleum products and underground storage tanks, having installed several USTs on the 1120 John Block, which contained heating oil, gasoline, diesel, nitric acid, or printing ink. Id. at 31. In addition, as a long-time neighbor, Seattle Times was aware, when it purchased the Property in 1985, that the facility was being used for laundry operations and that "a dry cleaning and leather care business" leased two buildings on the premises. See Ex. 1034.

1. Purchase of the Property from Troy

No evidence has been presented that, before buying the Property, Seattle Times engaged in an investigation concerning whether any pollutants had been released into the soil or groundwater. After taking title to the Property, Seattle Times performed an inspection and identified, in addition to some (but not all) of the USTs, drainage channels containing hazardous residue, two concrete pits containing waste water that the Municipality of Metropolitan Seattle ("Metro") allowed Seattle Times to discharge into the sewer system, an abandoned sump containing an oily toxic substance, a fiberglass tank containing roughly 5,000 gallons of contaminated recycled water, which was taken to a landfill, and various other items left behind by Troy, including a laundry machine, two settling tanks, a still, and barrels or containers of materials. PTO at 11, ¶ 28; Ex. 103 at § II; see also Ex. 1048.

In late 1985, Seattle Times submitted to Ecology a draft "Closure Plan" for the Property. PTO at 11, ¶ 29; see Ex. 1048. In the Closure Plan, Seattle Times proposed to comply with state and federal regulations "by removing all waste and waste residues from the solvent tanks." Ex. 103 at 8 (citing WAC 173-303-610 & 40 C.F.R. § 265.111 ). Seattle Times further committed to inspect drainage channels and the sump "to assure that there will be no postclosure escape or leaching of waste." Id. By letter dated March 12, 1986, Ecology authorized Seattle Times to proceed with closure activities, indicating that it would not require any public notice or a public hearing. Ex. 104.

In accordance with the Closure Plan, Seattle Times removed only one UST, decommissioned three other USTs, and disposed of waste water as previously indicated. Ex. 103 at 10-11, § III.B.1. Seattle Times represented to Ecology that Troy's parent company, Maryatt, had pumped out the contents of the two 12,000-gallon and the 1,000-gallon heating oil tanks, as well as the 8,000-gallon gasoline tank near Building 3, and had sealed each of these USTs. Id. at 7, § II.D. Seattle Times also agreed to properly dispose of the dangerous residue in the drainage channels and the toxic material in the abandoned sump, and to seal the well on the Property. Id. at §§ III.A.1 & C; see PTO at 11-12, ¶ 29.

In a letter dated April 17, 1986, counsel for Seattle Times, Jeff Belfiglio, discussed the status of closure efforts. Ex. 105. Mr. Belfiglio advised Ecology that, although the concrete wall of the abandoned sump was cracked, testing detected no leakage. Id. at ¶ 5. Because the solvent tanks likewise showed no sign of leaking, Mr. Belfiglio told Ecology that Seattle Times did not intend to test the soil or monitor the groundwater either before or in connection with demolition of the buildings. Id. at ¶ 6. Ecology responded in June 1986, stating that it found "the closure of the Troy Laundry facilities to be satisfactory." Ex. 106. Ecology reminded Seattle Times, however, that "if any contamination is found during subsequent activities at that facility, contaminated materials will have to be removed and disposed of in an appropriate manner." Id. ; see PTO at 11-12, ¶ 29.

2. Litigation Against Troy and Maryatt

In July 1986, Seattle Times commenced an action in King County Superior Court against Troy Linen & Uniform Service, Inc., its three former directors as trustees for its creditors, namely Charles R. Maryatt, Tim K. Rich, and David E. Maryatt, and American Linen Supply Company d/b/a Maryatt Industries for breach of contract, promissory estoppel, nuisance, misrepresentation, negligence, breach of lease, waste of leased premises, and recovery of response costs. See Ex. 1062 (Compl.); see also Ex. 1058 (1st Am. Compl.). In May 1987, Seattle Times again sued the same defendants, in federal court, seeking recovery of response costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). Ex. 1067 (Compl.). In the federal action, Seattle Times alleged that it had incurred in excess of $100,000 in direct costs during the closure process. Id. at ¶ 13; see PTO at 12:12-14.

In July 1987, both lawsuits were settled for $55,797. See PTO at 12:14; see also Ex. 1069 at 1. In connection with the settlement, Seattle Times released the named defendants, as well as the former shareholders of Troy, and their agents and assigns, from

all claims, expenses, attorney fees, causes of action or suits of any kind or nature, that the Seattle Times Company has or may later have on account of or in any way arising out of the presence of various flammable, hazardous and/or toxic wastes on [the Property] ..., specifically including but not by way of limitation, the costs of identifying, removing, and reporting as to such wastes, and from any and all claims, including third party claims, whether presently known or unknown, which may have arisen or may later arise out of the events generally described above.

Ex. 1069 at 1. The settlement was only partially funded by Maryatt. See Ex. 1073 at 69 (indicating that Maryatt paid only $15,000). The balance came from Troy's former shareholders, who had been joined in the state court action as third-party defendants. See Ex. 1064 (Maryatt's Ans. & 3d-Party Compl.); Ex. 1073 at 60 (reciting that Troy's former shareholders agreed to a two-thirds (2/3) share of the settlement amount). This arrangement is consistent with the Court's conclusion that Maryatt did not treat Troy as its alter ego. See supra note 19.

3. Use of the Property By Seattle Times

When Seattle Times purchased the Property, it intended to expand its newspaper-printing operations. PTO at 12, ¶ 30. Those plans did not, however, materialize, and Seattle Times instead used the Property for parking, to store furniture, newspaper racks, and other materials, and as a newspaper-rack repair facility. Id. In 1994, Seattle Times commissioned Remediation Technologies Incorporated ("RETEC"), an environmental consultant, to inspect the property. PTO at 12, ¶ 31; see Ex. 1075. Among other tasks, RETEC collected water samples from the supply well, which was located inside the industrial laundry facility. The samples revealed no detectable levels of volatile organic compounds (e.g. , PCE), but the concentration of petroleum hydrocarbons exceeded the then-applicable "cleanup" level set by Ecology. Ex. 1075. RETEC speculated that the result might be anomalous, observing that the water did not have a petroleum odor.

Id. Seattle Times did not retest the well water. See PTO at 12, ¶ 31.

4. Marketing the Property

In 2008, on behalf of Seattle Times, CenturyPacific, L.P. began marketing the Property for sale. See Ex. 521. The Offering Memorandum disclosed the three USTs in the Stoddard area and the existing well, but not the heating oil or gasoline tanks about which Seattle Times was also aware. Id. at 10. In addition, the Offering Memorandum made no mention of the prior use of the facility as a dry-cleaning plant. Id. The price sought in the Offering Memorandum was $20 million, all cash at closing, which Seattle Times anticipated could occur within 60 days. Id. at 7. On July 14, 2010, Seattle Times and Touchstone Corporation entered into a Real Estate Purchase and Sale Agreement ("PSA"), Ex. 96, indicating a purchase price of $18.2 million. Touchstone then began a due diligence process. PTO at 13, ¶ 33.

E. Touchstone SLU LLC and TB TS/RELP LLC

Touchstone Corporation later assigned its rights in the PSA to Touchstone SLU LLC. See Ex. 47 at 8. Touchstone SLU LLC and TB TS/RELP LLC are both Washington limited liability companies with principal places of business in Seattle, Washington. PTO at 6-7, ¶ 7. TB TS/RELP LLC is the current owner of the Property. Id. Touchstone SLU LLC is a member of TB TS/RELP LLC. Id. Unless otherwise stated, "Touchstone" refers to Touchstone Corporation, Touchstone SLU LLC, and/or TB TS/RELP LLC.

1. Environmental Assessment of the Property

On Touchstone's behalf, SoundEarth Strategies Inc., previously known as Sound Environmental Strategies ("SES"), conducted a two-phase environmental assessment of the Property. See PTO at 13, ¶ 33. Phase I was completed by September 2010. During the course of Phase I, SES performed a GORE™ soil gas survey, which revealed that PCE, TCE, and 1,2-dichloroethene were present in the soil "across much of the western half" of the Property, and that the highest concentrations of such chemicals were near the former loading dock and under the fur vault. Ex. 107 at 8. In addition, the GORE™ survey indicated that total petroleum hydrocarbons ("TPHs") were also in the soil in the vicinity of the former loading dock, as well as to the northeast of Building 3. Id. Water samples collected from the well inside the industrial laundry facility did not contain detectable concentrations of VOCs or GRPH, but tested positive for diesel and oil-range petroleum hydrocarbons. Id. at 25. A ground-penetrating radar survey confirmed the presence of a UST under the Boren Avenue North right-of-way and showed various anomalies that were consistent with existing or former USTs. Id. at 26. SES used the Phase I results to outline the scope of work for Phase II. See id. at 28.

SES completed Phase II by the end of October 2010. Ex. 109 (513). Phase II involved taking soil samples through 14 borings (P01-P14), which were advanced to a depth of 23 feet below ground surface ("bgs"), and collecting groundwater samples via a temporary well (at boring P10), which was drilled near the location of the former 8,000-gallon Stoddard solvent UST. Id. at 2 & 9 (Fig. 2). Figure 10 shows the locations of the various borings (and the well previously used by Troy). Soil samples taken at various depths from borings P03 and P05-P11 contained concentrations of PCE that exceeded the cleanup level of 0.05 mg/kg set by Ecology. Id. at 4-5. Soil samples collected from all other borings (P01, P02, P04, P12, P13, and P14) tested below the cleanup level for PCE. Id. at 5. Petroleum hydrocarbons above the cleanup level of 100 mg/kg were detected in the soil samples from P07 and P08. Id. at 4 & 14 (Table 1). The groundwater sample obtained from boring P10 (shown in blue) had concentrations of PCE, TCE, and diesel-range petroleum hydrocarbons exceeding cleanup levels. Id. at 5 & 16 (Table 2).

In early November 2010, Seattle Times and Touchstone executed a First Amendment to the PSA ("First Amendment"). Ex. 97. Pursuant to the First Amendment, the purchase price increased from $18.2 to $18.4 million. Id. The First Amendment added an "Environmental Contingency," pursuant to which Touchstone would have until December 10, 2010, to approve of the environmental condition of the Property or the PSA would terminate. Id. at ¶ 4. In addition, the First Amendment allowed Seattle Times to install a soil vaper extraction ("SVE") system on the Property and demolish the fur vault if necessary to do so. Id. at ¶ 6. As discussed in more detail later, see infra pp. 1034-35, Seattle Times hired a company to design, install, and operate an SVE system to significantly decrease the level of PCE in the soil on the Property, primarily near the loading dock.

2. Environmental Remediation and Indemnity Agreement

In December 2010, a Second Amendment to the PSA extended the Environmental Contingency period to December 17, 2010. Ex. 98. On December 17, 2010, the parties entered into a Third Amendment to the PSA ("Third Amendment"), as well as the Environmental Remediation and Indemnity Agreement ("ERIA"), which is the focus of the current dispute between Seattle Times and Touchstone. See Exs. 99 & 100. Pursuant to the Third Amendment, Touchstone waived the Environmental Contingency on the condition that Seattle Times execute the ERIA and deliver it to escrow pending closing. Ex. 99 at ¶¶ 1 & 2; see also PTO at 16, ¶ 48.

As indicated in the ERIA, Seattle Times and Touchstone were aware that, as of the effective date of the ERIA, December 17, 2010, hazardous substances were present in the soil, groundwater, and improvements at the Property. Ex. 100 at 1. To proceed forward with its purchase of the Property, Touchstone required Seattle Times to be responsible for remediating the existing contamination and indemnifying Touchstone in the manner set forth in the ERIA. Id. By executing the ERIA, Seattle Times agreed to reimburse Touchstone for the "Incremental Costs" of transporting and disposing of "Contaminated Soils," as opposed to "Clean Soils." PTO at 16, ¶ 49. Specifically, the ERIA provides:

"Incremental Costs" shall mean the difference between the costs of transporting and disposing of Contaminated Soils and the costs of transporting and disposing of Clean Soils. Incremental Costs do not include costs for transportation and disposing of Clean Soils, consequential damages, costs, if any, that Purchaser incurs due to construction delays, inefficiencies, business interruption or the like.

....

Seller and Purchaser contemplate that, during excavation of the Property in connection with Purchaser's intended development project, soil testing at the Property may identify additional Contaminated Soils that need to [be] remediated in order to achieve Soil Cleanup Criteria. In such event, Seller shall pay the Incremental Costs necessary to meet Soil Cleanup Criteria on the Property. Seller shall have the right to select the disposal site for Contaminated Soils removed from the Property.

Ex. 100 at ¶¶ 1(h) & 2. Seattle Times also agreed in the ERIA to indemnify Touchstone with respect to third-party claims, including those relating to groundwater contamination:

Seller shall release, indemnify, defend (with counsel of Seller's choice reasonably acceptable to Purchaser) and hold Purchaser harmless from and against any and all liabilities, claims, causes of action, liens, administrative proceedings, judgments, damages, losses, costs, expenses, fines, penalties or obligations of any kind, known or unknown, including reasonable attorneys' fees, asserted by third parties (including the Washington Department of Ecology) against Purchaser that arise out of, [sic] are associated with Contaminated Soils or Contaminated Groundwater that has or may have migrated off of the Property and onto, about or under adjacent property(ies).

Id. at ¶ 3.

3. Soil Vapor Extraction

In early January 2011, AECOM Environment ("AECOM") provided a report concerning its soil and groundwater investigation and the design of an SVE system for Seattle Times. Ex. 110 (510). Based on SES's prior results and AECOM's own tests, using 25 soil samples collected from six additional borings (B-1, B-2, and B-4 through B-7; B-3 was planned but never drilled), id. at 2, AECOM determined that the highest concentrations of PCE in soil were located near the loading dock and extended to a depth of about 12 feet bgs, id. at 4-5. AECOM estimated that the volume of soil with PCE concentrations above the cleanup level was 20,225 (860 + 19,365) cubic yards. See id. at 5. AECOM proposed an SVE system comprised of eight vertical wells placed in the vicinity of the loading dock and the former location of PCE operations, through which approximately 90% of the VOC vapors in the area would be removed from the soil over the course of six or more months. See id. at 5-6 & 15 (Fig. 3). Figure 11, on the next page, indicates the locations of AECOM's borings and of the SVE wells and related equipment.

The SVE system installed by AECOM operated in 2011 and 2012, and removed 327 pounds of PCE from the soil. PTO at 13, ¶ 35. AECOM decommissioned the system in January 2012. Id. ; see also Ex. 115 (493) at 46. No notice was provided to LeatherCare or Mr. Ritt before the SVE equipment was installed or when it was removed, and they first learned about the system in August 2015, around the time that Mr. Ritt was deposed in the related insurance coverage litigation (between Seattle Times and its insurers) to which he is not a party. See PTO at 13, ¶ 35; see also Ritt Dep. (Aug. 5, 2015) at 5:16-6:2 (docket no. 141). Seattle Times paid AECOM for its work and now seeks to recover inter alia $348,087 from LeatherCare and/or Mr. Ritt as reimbursement for the costs of designing and implementing the SVE system. See PTO at 18, ¶ 56; see also Zelikson Report at Table 1, Ex. 215 at 22 (filed as docket no. 122-1).

4. Supplemental Subsurface Investigation

While Seattle Times was working with AECOM on soil vapor extraction, SES was performing a supplemental subsurface investigation, which involved advancing eight more borings (three under the Harrison Street right-of-way, three under the Boren Avenue North right-of-way, and two on the Property ), seven of which would serve as permanent groundwater monitoring wells (MW01-MW07), and collecting additional soil and groundwater samples for testing. Ex. 112 (498) at 2. SES's report dated June 6, 2011, was admitted into evidence in CD form as Exhibit 112 and in excerpted, hardcopy form as Exhibit 498. According to the report, laboratory results indicated that, "with the exception of a slight exceedance of PCE in soil collected from B12 at a depth of 60 feet, soil samples collected from borings advanced within the [right-of-ways] to the north and west of the Property did not contain detectable concentrations of chlorinated solvents or petroleum hydrocarbons." Id. at 7. Thus, SES concluded that "the soil contamination associated with the historical use of the Property as an industrial dry cleaning facility appears to be confined primarily