## Facts

- Terra-Products, Inc. owned and operated a business on property in Montgomery County, Indiana (the “Terra Site”) and also owned an adjacent tract formerly used for battery manufacturing (the “Mallory Site”).
- Between 1957 and 1969, P.R. Mallory, Inc. operated a battery facility on the Mallory Site using materials containing PCBs; the facility was destroyed by fire in 1969 and not rebuilt.
- Terra purchased the Mallory Site from Mallory’s successors in 1975; Mallory later became part of Kraft/Duracell.
- In 1986, IDEM and the EPA determined PCB contamination was present at the Mallory Site, affecting both the Mallory Site and the Terra Site.
- The EPA issued an administrative order naming Terra and Kraft as potentially responsible parties and requiring implementation of a cleanup plan.
- Kraft conducted remediation pursuant to regulatory orders; the contamination was treated as remediated for purposes of the litigation.
- Terra sued Kraft under strict liability, negligence/negligence per se, nuisance, and trespass, seeking damages for alleged loss in fair market value; by appeal, Terra pursued damages only for the Terra Site because other claims were time-barred.
- Kraft counterclaimed for unjust enrichment; the trial court entered summary judgment for Kraft on Terra’s claims and for Terra on Kraft’s counterclaim.

## Issues

1. Whether Terra designated evidence creating a genuine issue of material fact that, after remediation, the Terra Site suffered a compensable residual diminution in fair market value.
2. Whether, under Indiana measures of damages for injury to real property (including environmental contamination), Terra could recover diminution-in-value damages without evidence of post-remediation market value.

## Decision

- The Court of Appeals affirmed summary judgment for Kraft on Terra’s claims.
- The court held Terra failed to designate evidence of any remaining post-remediation loss in the Terra Site’s fair market value.
- Because damages were unsupported on the designated record, Kraft was entitled to judgment as a matter of law without resolution of the substantive liability theories.
- The judgment for Terra on Kraft’s unjust-enrichment counterclaim was not challenged on appeal and remained in place.

## Legal Principles

- For injury to real property, Indiana distinguishes:
  - **Permanent injury:** generally measured by diminution in market value (value before injury minus value after injury).
  - **Temporary/remediable injury:** generally measured by restoration or remediation costs.
- Environmental cleanup obligations may make traditional “economic waste” limits on restoration damages ill-suited where remediation is legally required largely without regard to cost.
- Even where a court recognizes a potential combined approach (remediation plus residual diminution in value), a plaintiff must prove remediation did not fully restore market value and must quantify any remaining diminution.
- On summary judgment, the nonmovant must designate admissible evidence establishing a genuine issue of material fact; failure to designate evidence of an essential element (here, post-remediation diminished value) is fatal.

## Conclusion

The court affirmed summary judgment because Terra did not designate evidence that the Terra Site’s fair market value remained impaired after the PCB cleanup, a necessary showing to recover residual diminution-in-value damages beyond remediation.


Terra-Products, Inc. v. Kraft Gen. Foods, Inc., 653 N.E.2d 89 (Ind. Ct. App. 1995)