Maine Rubber International v. Environmental Management Group, Inc.

Maine Rubber International (plaintiff) planned to relocate its tire-manufacturing business to a new site known as the DuraStone property. Maine Rubber hired Environmental Management Group, Inc. (EMG) (defendant) to perform an environmental study known as a phase-1 assessment on the site. EMG’s inspection found no environmental hazards on the property. Relying on EMG’s inspection report, Maine Rubber proceeded with the purchase of the property. In preparing to relocate, Maine Rubber spent money on engineering studies, site-plan consulting, site studies, legal fees, and other expenses. Later, it was revealed that there were environmental hazards on the DuraStone property. Maine Rubber did not have time to assess or repair the defects prior to completing the transaction. Instead of conducting its planned, orderly relocation to the DuraStone property, Maine Rubber terminated the purchase agreement and hurriedly moved to a different property, incurring higher costs to move, lost profits, and a loss of the expenditures it had made on the DuraStone property. Maine Rubber sued EMG for breach of contract. The jury found EMG in breach and awarded Maine Rubber the parties’ $1,900 contract price, $211,625 for expenses Maine Rubber incurred in anticipation of the move to the DuraStone property, and $486,600 in lost profits. EMG moved for a judgment as a matter of law and for a new trial.