## Facts

- Plaintiffs Walter and Thelma Niecko purchased commercial real property in Jackson, Michigan from Emro Marketing Company for $46,000 in March 1987.
- The parcel had been used as a gasoline service station since the mid-1960s and previously contained underground gasoline storage tanks associated with prior operators/owners.
- The purchase agreement included broad disclaimers stating the seller made no warranties regarding legal compliance or condition and that the buyer took the property “as is” after inspection.
- Plaintiffs later sought to sell the property to McDonald’s and discovered soil contamination involving petroleum-related hydrocarbons (including benzene, toluene, ethyl benzene, and xylene).
- Plaintiffs incurred approximately $138,367 in cleanup costs to remove contaminated soil.
- Plaintiffs sued Emro under contract, fraud/fraudulent concealment, tort theories (negligence, nuisance, trespass), Michigan environmental statutes (including the leaking underground storage tank law), and CERCLA.
- Defendant moved for summary judgment.

## Issues

1. Whether the purchase agreement’s “as is” and no-warranty provisions barred plaintiffs’ state-law contract, statutory, and tort claims seeking cleanup-cost reimbursement for preexisting contamination.
2. Whether plaintiffs produced sufficient evidence of fraud or fraudulent concealment to avoid the effect of the contractual disclaimers.
3. Whether CERCLA allowed cost recovery for cleanup of petroleum-related contamination in light of CERCLA’s petroleum exclusion.
4. Whether plaintiffs had standing to seek equitable relief under the Michigan Environmental Protection Act after they no longer owned the property.

## Decision

- The court granted summary judgment for the defendant on all claims and dismissed the action with prejudice.
- The court held the contract’s “as is” and disclaimer terms allocated the risk of property condition to the buyers, barring the asserted state-law contract, statutory, and tort claims based on preexisting contamination.
- The court held plaintiffs failed to raise a genuine fact issue on fraud or fraudulent concealment because they did not show the defendant’s actual knowledge of contamination or an unreasonably dangerous condition at the time of sale.
- The court held CERCLA cost recovery was unavailable because the alleged contaminants were petroleum components within CERCLA’s petroleum exclusion.
- The court held plaintiffs lacked standing to pursue MEPA injunctive/equitable relief because they no longer owned or controlled the property.

## Legal Principles

- Clear “as is” and no-warranty provisions in a real estate sale can allocate to the buyer the risk of unknown defects, including environmental conditions, and can bar related state-law claims absent an applicable statutory limitation or proof of fraud.
- Fraudulent concealment in this context requires evidence that the seller knew of the material condition and intentionally failed to disclose it; without proof of actual knowledge, contractual disclaimers remain effective.
- CERCLA does not impose liability for releases consisting of “petroleum” or petroleum fractions not otherwise specifically designated as hazardous substances; petroleum-related gasoline constituents fall within this exclusion absent proof of a non-excluded hazardous release.
- A plaintiff seeking injunctive or equitable environmental relief must have a sufficient present interest in, or control over, the affected property to establish standing for that relief.

## Conclusion

The court enforced broad “as is” risk-allocation terms to preclude state-law recovery of cleanup costs, rejected fraud-based avoidance for lack of evidence of seller knowledge, held CERCLA inapplicable due to the petroleum exclusion, and denied MEPA relief for lack of standing, resulting in complete summary judgment for the seller.


Niecko v. Emro Mktg. Co., 769 F. Supp. 973 (E.D. Mich. 1991)