Arkansas Jury Awards $205,000 to Hampton Homeowners After Diesel Leak from Neighboring Conoco Station

Horace and Louise Gee owned a home in Hampton, Arkansas, on a lot directly adjacent to a Conoco convenience store operated by Felton Oil Company, LLC. The store sat at the southwest corner of Highways 167 and 278, with the Gees' property fronting Highway 278 next door. Felton Oil stored gasoline and diesel fuel in an underground storage tank system beneath the station.

At some point, the piping connected to a diesel pump developed a leak. Diesel fuel migrated underground and into the soil beneath the Gees' property. The Arkansas Department of Environmental Quality became involved and ordered Felton Oil to carry out a corrective-action remediation plan. What remained in dispute was who would bear the full cost of the damage done to the Gees' land.

Felton Oil did not contest liability. The only question put to the Calhoun County Circuit Court jury was the amount of damages. The Gees argued their property loss should be measured by the reasonable cost to restore the contaminated land to its prior condition, not merely by the reduction in the property's market value. The distinction mattered: the diminished market value of the Gees' property was estimated at about $20,500, well below the actual cost of remediation.

McMath Woods attorney Samuel E. Ledbetter represented the Gees and pressed the restoration-cost measure of damages. The argument drew on Restatement (Second) of Torts section 929, which permits a plaintiff to recover the cost of necessary restoration when the harm to land is temporary and capable of remediation. Because ADEQ's corrective-action plan confirmed the contamination could be cleaned up, the court treated the injury as temporary rather than permanent.

The jury awarded the Gees $180,000 for temporary property restoration costs and an additional $25,000 for discomfort, disruption, and inconvenience during the cleanup period, totaling $205,000. Felton Oil and the State of Arkansas, which had intervened to protect its interest in the Arkansas Petroleum Storage Tank Trust Fund, both appealed.

The Arkansas Supreme Court affirmed the verdict in May 2004. On the measure of damages, the court held that a landowner may elect restoration costs over diminished market value when the property injury is temporary. The $25,000 disruption award was upheld as well; the court found that section 929 expressly authorizes compensation for the interference a landowner endures while necessary repairs are made, separate from any nuisance claim. No remittitur was ordered, and the full $205,000 verdict stood.