(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of
the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity,
portions of any opinion may not have been summarized).
Argued January 16, 2001 -- Decided May 22, 2001
STEIN, J., writing for a unanimous Court.
The issue in this appeal is whether the New Jersey Real Estate Residential Off-Site Conditions Disclosure Act
(Disclosure Act or Act) authorizes lawsuits against Edison Glen, condominium developers and sellers, under the Consumer
Fraud Act for knowingly failing to disclose to the plaintiffs, purchasers of the condominium units, the existence of toxic
waste sites in close proximity to the condominium development, and whether the provisions of the Disclosure Act that
exonerate sellers from liability for non-disclosure of off-site conditions prior to that Act's effective date may be applied
retroactively in this case.
Eileen Nobrega, president of the Edison Glen Condominium Association, is one of the purchasers of sixty
residential units in the Edison Glen complex acquired between February 1987 and September 1991. The complex is located
on Route 1 in Edison Township, which hosts at least three “Superfund” sites included on the U.S. Environmental
Protections Agency's (EPA) National Priorities List (NPR). Two of those sites are located within two miles of the Edison
Glen complex. The first site was placed on the Superfund list in 1982, prior to the construction of the Edison Glen
complex, as a result of the EPA's determination that storage containers containing hazardous waste had deteriorated,
permitting the discharge of lethal toxins into the soil and groundwater. The second was placed on the Superfund list in
1990, after the EPA determined that arsenic and other hazardous substances had leached into the soil and groundwater after
being illegally dumped on certain property.
Edison Glen began developing and selling units in the complex in 1987. Nobrega and the other purchasers of the
units alleged that Edison Glen knew or should have known of the nearby Superfund sites and of the hazardous conditions,
but failed to disclose that information to them before they purchased the condominiums. After learning, through an
appraiser's report, that the market value of their units had declined substantially as a result of the proximity of the
Superfund sites to the complex, Nobrega and the other owners filed suit in May 1997, alleging common law claims of
negligence, fraud and misrepresentation, breach of contract, breach of warranty, and violation of the Consumer Fraud Act.
Edison Glen moved to dismiss the complaint on the ground that each of the claims were barred by the Disclosure Act.
Although that Act was passed after the subject properties had been conveyed, Edison Glen argued that the Disclosure Act
applied retroactively to bar the homeowners' claims. The Law Division granted Edison Glen's motions with respect to the
common law claims, but ruled initially that the Consumer Fraud Act claims survived the Disclosure Act. However, the trial
court reversed itself on Edison Glen's motion for reconsideration, concluding that Section 10 of the Disclosure Act
precluded the homeowner's Consumer Fraud Act claims.
The Appellate Division reversed, holding that the Disclosure Act did not bar Consumer Fraud Act claims for
intentional failure to disclose off-site conditions affecting the value of properties. The Appellate Division did not address
the retroactivity issue.
The Supreme Court granted Edison Glen's petition for certification.
HELD: The New Residential Real Estate Off-Site Conditions Disclosure Act prospectively precludes the homeowner
plaintiffs from suing sellers and developers of real estate under the Consumer Fraud Act for failure to disclose off-site
conditions, provided that the sellers and developers satisfy their disclosure obligations under Sections 8 and 9 of the Act;
the Act may not be applied retroactively to those homeowners who would not have had a remedy under The Planned Real
Estate Development Full Disclosure Act.
1. In Strawn v. Canuso, the Consumer Fraud Act was held to require the seller of property to disclose off-site conditions
affecting the value of the subject property, which conditions were known to the seller, but not evident to the buyer.
Following the Court's holding requiring such disclosure, the Legislature enacted the Disclosure Act, which requires persons
who own, lease or maintain potentially dangerous off-site conditions to provide the municipal clerk of each municipality in
which the conditions exist a list of those conditions and their location, and to update the list annually. The Act further
requires the seller of the property to provide the prospective purchaser with a notice of the of the availability of the lists of
off-site conditions in the municipal clerk's office and of the buyer's right to cancel the contract within five days after its
execution. (pp. 7-10)
2. Although the Disclosure Act provides that a seller has discharged his or her disclosure responsibilities by furnishing
notice of the availability of the lists, Section 10(d) specifically provides that the Act shall not be interpreted to affect the
disclosure requirements for off-site conditions contained in The Planned Real Estate Development Full Disclosure Act and
the Air Safety Zoning Act of 1983, or in any other statutory provision. That the Act was intended to bar non-statutory
claims is clear. (pp. 10-13)
3. Because Sections 2, 10(a), 10(b), and 10(d) of the Disclosure Act contradict, one must look beyond the plain meaning of
those sections and look to the legislative intent. (pp. 13-14)
4. The legislative history of the Disclosure Act makes clear that its intent was to reverse the effect of Strawn as the case
relates to residential real estate contracts for new construction entered into prior to its effective date, and any ambiguities in
the Act must be interpreted in a manner that effectuates that purpose. Thus, the Disclosure Act prospectively precludes
plaintiffs from suing sellers and developers of real estate under the Consumer Fraud Act for failure to disclose off-site
conditions, provided that the sellers and developers satisfy their disclosure obligations under Section 8 and 9 of the Act.
(pp. 15-16)
5. The “any other statutory provision” exception contained in Section 10(d) of the Disclosure Act includes only statutes
that impose specific off-site disclosure obligations for sellers of real estate, either on the face of the statute or by way of
administrative regulation. Prohibitions expressed with the generality of the Consumer Fraud Act do not fall within the “any
other statutory provision” exception in Section 10 (d). (pp. 16-18)
6. The plain language of Section 10(c) of the Disclosure Act evidences a clear legislative intent that the Act apply
retroactively to all cases in which the real estate contracts have been entered into prior to the Act's effective date. (pp. 18-
21)
7. The Disclosure Act would not be applied retroactively if retroactive application would be unconstitutional, which in the
past has been defined as interfering with “vested rights,” or if retroactive application, even if constitutional, would
constitute “manifest injustice.” (pp. 21-22)
8. Consistent with contemporary United States Supreme Court legislative retroactivity decisions, the Court is disinclined to
pursue a “vested rights” analysis in determining whether Section 10(c) of the Disclosure Act violates plaintiff's rights under
the Due Process Clause. Rather, in place of that inquiry, a rational basis scrutiny will be applied. Thus, if Section 10(c) is
supported by a legitimate legislative purpose furthered by rational means, it will withstand a due process challenge. (pp.
22-32)
9. Because a clear manifest injustice would result by the retroactive application of the Disclosure Act in this case, the much
closer constitutional question need not be resolved. (pp. 32-34)
10. The basic principle of Strawn -- that purchasers of real estate are entitled to know about material off-site conditions --
was both deducible from prior precedent and reaffirmed by the Legislature in the Disclosure Act itself. Thus, there was
sufficient reliance on pre-existing law in this case to implicate the manifest injustice analysis. (pp. 34-38)
11. Because of the limited record before the Court, the matter is remanded to the trial court for a determination of which, if
any, of the homeowners could have pursued a PREDFDA claim within the limitations period set forth in that law. Those
plaintiffs who could have filed a PREDFDA claim would not suffer manifest injustice by the retroactive application of the
Disclosure Act. However, those plaintiffs who were barred from filing a PREDFDA claim at the time they first became
aware of the diminution of their property values may maintain their common law and Consumer Fraud Act causes of action
notwithstanding the retroactivity provision of the Disclosure Act, as those plaintiffs otherwise would be deprived of a
remedy for violation of a right that the Disclosure Act itself affirms. (pp. 38-41)
Judgment of the Appellate Division is MODIFIED and the matter is REMANDED to the Law Division for
further proceedings consistent with this opinion.
CHIEF JUSTICE PORITZ and JUSTICES COLEMAN, LaVECCHIA, and ZAZZALI join in JUSTICE STEIN's
opinion. JUSTICES LONG and VERNIERO did not participate.
SUPREME COURT OF NEW JERSEY
A-
130 September Term 1999
EILEEN NOBREGA, FRANK AND ANNA
SCALISE, SALVATORE APUZZIO, JR.,
DORIS AND KWONG AU, SAMUEL
BASKINGER, BONNIE BERTUCCI,
BRUCE AND RACHEL BINKOWITZ,
WILLIAM BLUESTONE, YVONNE BRIX,
PATRICIA BUSH, ROLAND AND BETTY
CHANG, JIM AND CHUEN CHU, ALICJA
CIOBANU AND PAUL SZOTT, CORNELL
AND FRAN COCO, DAN AND CONNIE
COLON, ROSE MARY CORRALES, ALAN
AND BARBARA COSCARELLI, SCOTT
AND CHRISTY DAVIS, ELAINE
DeLORENZO, DIANE DIGIULIO,
ARLENE AND BARRY FINK, STEVEN
AND KATHLEEN FUSCHETTI,
ELIZABETH GOMEZ, WORSELEY AND
ULA GREENIDGE, HARRY GRIEFER,
MICHAEL AND TERESA HAMMALAK,
ANDRE AND MERITTA HERSCOVICI,
MARILYN AND GEORGE HIGGINS,
LINDA IONTA, STEPHEN E. AND AMY
S. KANE, ARLENE KAPLAN, IRWIN,
BARRY AND MURIEL KESHNER,
CAROLYN B. KILPONEN, BILL AND
TERRY KONCAR, FRANK KOWALEWSKI,
ALBERT AND JEAN KUCHINSKAS,
THERESA LEONARDIS, JOHN AND
PHYLLIS MAFFUCCI, JOSEPH AND
CELIA MANDEL, NATHAN AND MOLLY
MARKO, ESTHER MULLALY, TERESA
O'HARA, LEONARD OLEN, VICTORIA
MONTANINO ORTIZ, OSCAR AND LOIS
PANNELLA, AUDREY PRESS, SUSAN
PUHAN, DONNA RANDO, YVES ROC,
SCOTT ROSMARIN, KENNETH G.
SABLE, MARK AND MIRTA SMOLAR,
ZAIDA AND ANGEL SOTOLONGO,
KATHRYN STANCO, STEWART
THOMPSON, VINCENT AND CAROLYN
VARCA, ANDREW AND CAROLYN
VITTORIA, LARRY AND ARLEEN
WEISENSTEIN, DANA ZAIFERT and
EDWARD ZIMMERMAN,
Plaintiffs-Respondents,
v.
EDISON GLEN ASSOCIATES, a New
Jersey Partnership, ARIE
HALPERN, DAVID HALPERN, FRED
HALPERN, JACK HALPERN, MURRAY
HALPERN, SAM HALPERN, JOSEF
PARADIS, HENRY STEIN, ESTATE OF
HARRY WILF, JOSEPH WILF, ERIC
ROSENBAUM and PAUL VISSER,
Defendants-Appellants,
and
JOHN DOES A-S,
Defendants.
Argued January 16, 2001 -- Decided May 22, 2001
On certification to the Superior Court,
Appellate Division, whose opinion is
reported at
327 N.J. Super. 414 (2000).
Frederick B. Polak argued the cause for
appellants (Post, Polak, Goodsell &
MacNeill, attorneys; Mr. Polak, Robert A.
Goodsell and Christopher O. Eriksen, of
counsel and on the briefs).
Dennis A. Estis argued the cause for
respondents (Greenbaum, Rowe, Smith, Ravin,
Davis & Himmel, attorneys; Mr. Estis and
Jessica R. Mayer, on the briefs).
Paul H. Schneider argued the cause for
amicus curiae, New Jersey Builders
Association (Giordano, Halleran & Ciesla,
attorneys; Michael J. Gross, of counsel).
The opinion of the Court was delivered by
STEIN, J.
Plaintiffs are ninety homeowners who purchased condominium
units from Petitioners Edison Glen Associates and its individual
partners (Edison Glen), the developers and sellers of those
units. We granted certification to decide whether the New
Residential Real Estate Off-Site Conditions Disclosure Act
(“Disclosure Act” or “Act”), N.J.S.A. 46:3C-1 to -12, authorizes
lawsuits against Edison Glen under the Consumer Fraud Act,
N.J.S.A. 56:8-1 to -85, for knowingly failing to disclose to
plaintiffs the existence of toxic waste sites in close proximity
to the condominium development, and whether the provisions of the
Act that exonerate sellers from liability for non-disclosure of
off-site conditions prior to the Act's effective date may be
applied retroactively in this case.
This action initially was dismissed in the Law Division on the basis of a Rule 4:6-2(e) motion to dismiss that was converted into a motion for summary judgment, Rule 4:46-2, by the submission of certifications, with the result that the facts are relatively undeveloped. Viewed in a light most favorable to plaintiffs, the non-moving party, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the relevant facts are as follows. Respondent Eileen Nobrega is president of the Edison Glen Condominium Association and one of the purchasers of sixty residential units in the Edison Glen complex acquired between February 1987 and September 1991. The complex contains 315 units and is located on U.S. Route 1 in Edison Township, Middlesex County. Edison hosts at least three “Superfund” sites included on the U.S. Environmental Protection Agency's (EPA) National Priorities List (NPR) pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C.A. §9601 to 9675. Two of those sites are located within two miles of the Edison Glen complex. The first, a site formerly used by Renora, Inc., was placed on the Superfund list in 1982, prior to the construction of the Edison Glen complex, as a result of the EPA's determination that its storage containers for hazardous waste had deteriorated, permitting the discharge of lethal toxins into the soil and groundwater. The second, formerly owned by Chemical Insecticide Corporation, was placed on the Superfund list in 1990 after the EPA determined that arsenic and other hazardous substances had leached into the soil and groundwater after being dumped illegally on the property.
Edison Glen began developing and selling units in the complex in 1987. Plaintiffs allege that Edison Glen knew or should have known about the nearby Superfund sites, and of the hazardous substances that discharged into the surrounding soil and groundwater, but failed to disclose that information to plaintiffs before the condominiums were purchased. Nobrega stated in her certification that she did not become aware of the existence of the Superfund sites until 1992 or 1993. She added that around 1993 or 1994 she discovered that several homeowners in the development were experiencing difficulty selling their units, and that around the same time Edison Glen ceased selling the remaining units, electing instead to reserve them for rental. In November 1996, an appraisal agency hired by plaintiffs issued a report in which it concluded that, based on a preliminary analysis of sales between 1988 and 1995, the market value of the Edison Glen units declined by 40 percent, presumably as a result of the proximity of the Superfund sites to the units. Plaintiffs contend that the report made them aware for the first time that they suffered actual damages as a result of the Superfund sites.
After negotiations between plaintiffs and Edison Glen proved futile, plaintiffs brought suit in May 1997, alleging common law claims of negligence, fraud and misrepresentation, breach of contract, breach of warranty, and violation of the Consumer Fraud Act. Edison Glen moved to dismiss on the ground that each of the claims were barred by the Disclosure Act. The Law Division granted Edison Glen's motions with respect to the common law claims, but ruled initially that the Consumer Fraud Act claims survived the Disclosure Act. The court reversed itself, however, on Edison Glen's motion for reconsideration, concluding that Section 10 of the Disclosure Act precluded plaintiffs' Consumer Fraud Act claims.
The Appellate Division reversed. Nobrega v. Edison Glen Associates, 327 N.J. Super. 414 (App. Div. 2000). We granted certification, 165 N.J. 137 (2000).
Plaintiffs claim that Edison Glen owed them a duty under the common law and Consumer Fraud Act to disclose the existence of the two nearby Superfund sites, and that Edison Glen's breach of that duty caused them damages. Edison Glen defends by arguing that the Disclosure Act, which was passed after the properties in this case were conveyed, applies retroactively to bar plaintiffs' claims. The Appellate Division did not address the retroactivity issue, holding instead that the Disclosure Act did not bar Consumer Fraud Act claims for intentional failure to disclose off-site conditions affecting the value of properties. 327 N.J. Super. at 420-26.
In Strawn v. Canuso, 140 N.J. 43 (1995), we addressed claims by over 150 families seeking damages because the new homes they purchased were constructed near a hazardous waste dump site, and the defendants _ builders and brokers of the multi-home development _ failed to inform the plaintiffs of the existence of the site. Id. at 49. The plaintiffs in Strawn based their claims on common law principles of fraud and negligent misrepresentation, and the Consumer Fraud Act. Ibid.
In relevant part, the Consumer Fraud Act declares as an unlawful practice the knowing “concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any . . . real estate.” N.J.S.A. 56:8- 2.
In Strawn, Justice O'Hern, writing for a unanimous Court, held that pursuant to the Consumer Fraud Act and corollary common law principles, the defendants were subject to a duty to disclose off-site conditions affecting the value of the properties:
[A] builder-developer of residential real estate or a broker representing it is not only liable to a purchaser for affirmative and intentional misrepresentation, but is also liable for nondisclosure of off-site physical conditions known to it and unknown and not readily observable by the buyer if the existence of those conditions is of sufficient materiality to affect the habitability, use, or enjoyment of the property and, therefore, render the property substantially less desirable or valuable to the objectively reasonable buyer.
[Id. at 65.]
Five months after we decided Strawn, the Legislature enacted the Disclosure Act. L. 1995, c. 253 (eff. Sept. 12, 1995). Section 2 of the Act, entitled “Legislative findings and declaration,” provides:
The Legislature finds and declares that the purchase of a residence involves a substantial portion of the average household's net worth, and the decision to purchase a particular residence requires consideration of a wide range of factors concerning the area in which the residential real estate is located; that the professionals who engage in the business of selling newly-constructed residential real estate can facilitate prudent decision-making with respect to the purchase of residences by advising purchasers of the availability of information concerning factors which can reasonably be determined to exist and which may affect the value of the residence; that the due diligence responsibilities of purchasers and the disclosure duties of sellers of residential real estate are mutually interdependent and, therefore, ambiguity in the definition and assignment of the sellers' disclosure duties may inadvertently diminish the due diligence efforts of purchasers, or unnecessarily increase the costs of residential real estate transactions; and that there currently exists ambiguity concerning the disclosure duties of the sellers of residential real estate.
The Legislature therefore determines that it is in the public interest to define the entirety of the disclosure duties of the sellers of newly-constructed residential real estate and to create a public repository of relevant off-site conditions which may be accessed by purchasers of such real estate.
[N.J.S.A. 46:3C-2 (emphasis added).]
The Act creates a disclosure scheme requiring persons who own, lease or maintain potentially dangerous off-site conditions as enumerated by the Act to provide the municipal clerk of each municipality in which the conditions exist a list of those conditions and their location, and to update the list annually. N.J.S.A. 46:3C-5.See footnote 11 In addition, the Commissioner of the Department of Environmental Protection is required to provide all municipal clerks with lists of off-site conditions that are located within their respective jurisdictions. N.J.S.A. 46:3C-6. The Act requires the seller of new real estate construction to provide the prospective purchaser with a notice, as prescribed by the Act, of the availability of the lists of off-site conditions in the municipal clerk's office and of the buyer's right to cancel the contract within five days after its execution. N.J.S.A. 46:3C-8 to -9.
Several portions of the Disclosure Act provide clearly that a seller satisfies its disclosure obligation by furnishing notice of the availability of the lists pursuant to Section 8 of the Act. As noted, the statement of legislative findings indicates that the Legislature intended to “define the entirety of the disclosure duties of the sellers of newly-constructed residential real estate.” N.J.S.A. 46:3C-2. Section 10(a) of the Act states that “[b]y providing the purchaser with the notice of the availability of the lists, as required by [the Act], the seller . . . shall be deemed to have satisfied fully the seller's disclosure duties pursuant to New Jersey law.” N.J.S.A. 46:3C- 10(a). Similarly, Section 10(b) provides that “[a] seller's responsibility to disclose those conditions that may materially affect the value of the residential real estate, but which are not part of the project, shall be fully met when notice is provided in accordance with the provisions of [the Act].” N.J.S.A. 46:3C-10(b). The furnishing of notice “shall be available to the seller as a defense to any claim that the seller failed to disclose any conditions which are not part of the project.” Ibid.
Notwithstanding those provisions, Section 10(d) provides that the Act
shall not be interpreted to affect the disclosure requirements for conditions off- site contained in “The Planned Real Estate Development Full Disclosure Act,” P.L.1977, c. 419 (C. 45:22A-21 et seq.), the 'Air Safety and Zoning Act of 1983,' P.L.1983, c. 260 (C. 6:1-80 et seq.) or in any other statutory provision.
[N.J.S.A. 46:3C-10(d) (emphasis added).]
That the Act was intended to bar non-statutory claims is clear. Plaintiffs contend, however, and the Appellate Division held, that the phrase “any other statutory provision” in Section 10(d) includes the Consumer Fraud Act. In support of its holding, the Appellate Division relied on two statements by then-Governor Christine Todd Whitman respecting the bill that became the Disclosure Act. Nobrega, supra, 327 N.J. Super. at 422. Prior to the passage of the bill, Governor Whitman issued a statement in which she noted “the need for consumers to know of the existence of off-site conditions and the need for sellers to know the extent of their duty to disclose,” and stated that “the bill accomplishes this, I am assured by both sponsors and all interested parties, without interfering with any remedies that may be available in appropriate cases to prospective buyers under the Consumer Fraud Act . . . or any other relevant statute.” Ibid. Governor Whitman reiterated that view in a press release issued on the day she signed the bill: “In a statement of intent, Governor Whitman said that the bill does not interfere with any remedies available to prospective buyers under the Consumer Fraud Act.” Ibid.
Those statements, in addition to “this State's long-standing public policy of affording consumers protection from unconscionable commercial practices,” id. 423, persuaded the Appellate Division to construe the phrase “any other statutory provision” in Section 10(d) to include the Consumer Fraud Act. The court stated:
[I]t is only the applicability of common-law causes not comprehended by the Consumer Fraud Act that the Legislature intended to abrogate by passing the Disclosure Act. It is well settled that while the Consumer Fraud Act imposes liability both for affirmative misrepresentations and for omissions or failures to disclose, ordinarily only affirmative misrepresentations may be actionable if not made knowingly. Omissions of disclosure, to the contrary, are actionable only if . . . the failure to disclose was intentional. We are satisfied that it was preservation of the element of intent, which results in imposition of a more fairly certain and ascertainable obligation of the seller, that was the Legislature's primary concern.
[Nobrega, supra, 327 N.J. Super. at 425 (citations omitted).]
We first consider whether the Disclosure Act precludes claims brought under the Consumer Fraud Act. As noted, Sections 2, 10(a) and 10(b) of the Disclosure Act make clear that satisfaction of the disclosure responsibilities specified by the Act “shall be deemed to have satisfied fully the seller's disclosure duties pursuant to New Jersey law.” N.J.S.A. 46:3C- 10(a). Nevertheless, the Act preserves off-site disclosure responsibilities contained in two specific acts - the Planned Real Estate Development Full Disclosure Act (PREDFDA), N.J.S.A. 45:22A-21 to -56, and the Air Safety and Zoning Act of 1983, N.J.S.A. 6:1-80 to -88 - in addition to “any other statutory provision.” N.J.S.A. 46:3C-10(d). Clearly, a seller cannot “satisf[y] fully the seller's disclosure duties pursuant to New Jersey law,” N.J.S.A. 46:3C-10(a), if the seller remains subject to off-site disclosure requirements of “any other statutory provision.” N.J.S.A. 46:3C-10(d). The provisions contradict, and if we are to provide a workable interpretation of the Act as a whole we will have to move beyond the plain meaning of those sections.
We have long adhered to the well-known canon of statutory construction that the general legislative intent of a statute “will control the interpretation of its parts.” State v. Bander, 56 N.J. 196, 201 (1970). The legislative history of the Disclosure Act demonstrates that the Act was passed in direct response to our holding in Strawn, supra. The Assembly Committee Statement to the Disclosure Act provides in relevant part:
In Strawn v. Canuso, decided April 25, 1995, the New Jersey Supreme Court found that sellers of newly constructed residential real estate had certain duties to disclose off- site conditions but offered little guidance as to the extent of the duty or what is required to its satisfaction. This bill defines in its entirety the duty to disclose and those actions necessary to fulfill such duty.
[Assembly Housing Committee, Statement to Assembly Committee Substitute for Assembly Bill No. 2646 (June 8, 1995).]
We find that statement to be clear and both reflective of the timing of the Act, which was passed only five months after we filed our opinion in Strawn, and the intent expressed in the Act itself to “define the entirety of the disclosure duties of the sellers of newly-constructed residential real estate.” N.J.S.A. 46:3C-2. We are mindful of statements by Governor Whitman, highlighted by the Appellate Division, that may suggest a contrary interpretation of the Act. However, although we may look to statements by the executive branch in determining legislative intent, see State v. Sutton, 132 N.J. 471, 483 (1993) (noting that communications from executive branch offer “reliable aid” in determining legislative intent), we afford little weight to such sources where the legislative history itself speaks clearly. See Cornblatt v. Barow, 153 N.J. 218, 235 (1998) (finding governor's statement “not informative” in view of legislative history).
In our view, the evidence of legislative intent surrounding the Disclosure Act undermines the Appellate Division's conclusion. As noted, the Appellate Division construed the phrase “any other statutory provision” to include the Consumer Fraud Act, and construed Sections 10(a) and 10(b) to abrogate only “common-law causes not comprehended by the Consumer Fraud Act,” thereby effecting “preservation of the element of intent” in non-disclosure cases. Nobrega, supra, 327 N.J. Super. at 424- 25. Strawn does not address the consequences of unintentional failures to disclose; the standard established by Strawn imposes liability for “nondisclosure of off-site physical conditions known to [the seller] and unknown and not readily observable by the buyer.” Strawn, supra, 140 N.J. at 65 (emphasis added). The Appellate Division's interpretation of the Disclosure Act thus preserves the basic holding of Strawn. “[I]n seeking to discover the legislative intent, the statute must be read in the light of the old law, the mischief sought to be eliminated and the proposed remedy.” Brewer v. Porch, 53 N.J. 167, 174 (1969). The legislative history demonstrates that the Disclosure Act was passed in order to overturn Strawn, and we must interpret ambiguities in the Act in a manner that effectuates that purpose. We therefore hold that the Disclosure Act prospectively precludes plaintiffs from suing sellers and developers of real estate under the Consumer Fraud Act for failure to disclose off-site conditions, provided that the sellers and developers satisfy their disclosure obligations under Section 8 and 9 of the Act.
If the phrase “any other statutory provision” in Section 10(d) of the Act does not include the Consumer Fraud Act, it is fair to ask what that language does include. We have noted that “[e]xceptions to a statutory scheme . . . should be construed narrowly.” Young v. Schering Corp., 141 N.J. 16, 25 (1995); Service Armament Co. v. Hyland, 70 N.J. 550, 558-59 (1976) (“[W]e are guided by both the legislative intent and the general principle that exceptions in a legislative enactment are to be strictly but reasonably construed, consistent with the manifest reason and purpose of the law.”). The best way to understand the “any other statutory provision” language is by reference to the two statutes cited specifically in Section 10(d), PREDFDA and the Air Safety and Zoning Act. Each of those statutes imposes specific disclosure obligations with respect to off-site conditions. The Air Safety and Zoning Act requires a seller to notify a prospective buyer prior to signing a contract for sale that the property is located in an airport safety zone because of the property's proximity to an airport. N.J.S.A. 6:1-85.2. PREDFDA requires a seller of real estate to issue a public offering statement that must disclose “all unusual or material circumstances or features affecting the development.” N.J.S.A. 45:22A-28(a). Administrative regulations specify the circumstances and features contemplated by N.J.S.A. 45:22A-28, and require, in part, the disclosure of a property's proximity to “airports or flight paths, railroads, noisy or polluting industrial use or other similar forces.” N.J.A.C. 5:26- 4.2(a)(17).
Interpreted narrowly, and reflective both of the statutes specified in Section 10(d) and the overall purpose of the Disclosure Act, we are persuaded that the “any other statutory provision” exception includes only statutes, like PREDFDA and the Air Safety and Zoning Act, that impose specific off-site disclosure obligations for sellers of real estate, either on the face of the statute or by way of administrative regulation. The Consumer Fraud Act prohibits “knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any . . . real estate.” N.J.S.A. 56:8-2. Prohibitions expressed with the generality of the Consumer Fraud Act do not fall within the “any other statutory provision” exception in Section 10(d).
[N.J.S.A. 46:3C-10(c).]
Generally, we favor interpretation of statutes that afford prospective application only. Gibbons v. Gibbons, 86 N.J. 515, 521 (1981). However, where there is an “unequivocal expression of contrary legislative intent,” Dewey v. R.J. Reynolds Tobacco Co., 121 N.J. 69, 95 (1990), we will recognize the Legislature's determination. In discerning the legislative intent, we look first to the plain terms of the statute. Phillips v. Curiale, 128 N.J. 608, 617 (1992); Morristown v. Woman's Club of Morristown, 124 N.J. 605, 610 (1991); State v. Butler, 89 N.J. 220, 226 (1982). “If the statute is clear and unambiguous on its face and admits of only one interpretation, we need delve no deeper than the act's literal terms to divine the Legislature's intent.” Butler, supra, 89 N.J. at 226.
Read literally, Section 10(c) would insulate defendants from plaintiffs' common-law fraud and Consumer Fraud Act claims. Plaintiffs, however, interpret the phrase “entered into and fully executed” narrowly to encompass only cases where the real estate transaction has been completed but where the property has not yet been conveyed. We find nothing in the plain meaning of Section 10(c) that affords such a limited reading. Black's Law Dictionary defines “execute” as “[t]o fulfill the purpose of; to obey; to perform the commands of.” Black's Law Dictionary 676 (4th ed. 1951). Similarly, Webster's defines “execute” as “to put into effect: carry out fully and completely . . . perform the acts necessary to the effectiveness of.” Webster's Third New International Dictionary 794 (unabridged 1993). Those definitions are reflected in our jurisprudence. See Wolkoff v. Villane, 288 N.J. Super. 282, 287 n. 1 (App. Div. 1996) (citing cases establishing “that 'executed' is used in the sense of 'performed' or 'carried out'”). Obviously a contract for property is not performed completely until the property is actually conveyed. We find the plain language of Section 10(c) to be clear _ the Legislature intended that the Disclosure Act apply retroactively to all cases in which the real estate contracts have been entered into prior to the Act's effective date, and that includes those contracts for which the property has been actually conveyed. Notwithstanding Section 10(c), however, we may pursuant to long-standing precedent decline to apply the Disclosure Act retroactively if one of two conditions is met. First, we would not apply the Disclosure Act retroactively if retroactive application would be unconstitutional. See State Troopers Fraternal Ass'n of New Jersey v. State, 149 N.J. 38, 54 (1997); Phillips, supra, 128 N.J. at 617-21; Twiss v. State, 124 N.J. 461, 469 (1991). In previous cases we have framed that analysis by asking whether retroactive application would constitute “an unconstitutional interference with 'vested rights.'” Phillips, supra, 128 N.J. at 617. Even in the absence of a constitutional violation, we may nevertheless apply our equitable powers and decline to apply the Act retroactively if retroactive application would constitute “manifest injustice.” State Troopers, supra, 149 N.J. at 55-56; In re D.C., 146 N.J. 31, 58 (1996); Phillips, supra, 128 N.J. at 617.
Our guarded review of retroactive legislation reflects a long-standing belief, as expressed by Joseph Story, that “[r]etrospective laws are, indeed, generally unjust; and, as has been forcibly said, neither accord with sound legislation, nor with the fundamental principles of the social compact.” 2 Joseph Story, Commentaries on the Constitution of the United States (Abridgment) § 711 (1838). Retroactive legislation “presents problems of unfairness that are more serious than those posed by prospective legislation, because it can deprive citizens of legitimate expectations and upset settled transactions.” General Motors Corp. v. Romein, 503 U.S. 181, 191, 112 S. Ct. 1105, 1111, 117 L. Ed.2d 328, 340 (1992). Our “vested rights”/”manifest injustice” analysis, to which we have referred consistently in our decisions over the past two decades, see Edgewater Investment Associates v. Borough of Edgewater, 103 N.J. 227, 238-40 (1986); State v. Ventron Corp., 94 N.J. 473, 498-99 (1983); Gibbons, supra, 86 N.J. at 521-24, reflects our longstanding recognition of the potential unfairness of retroactive legislation. We reaffirm that recognition today. However, we have discerned in prior cases some doctrinal confusion in the application of the “vested rights” analysis specifically and, more generally, the relationship between the “vested rights” and “manifest injustice” doctrines. We therefore take this opportunity to clarify the two-prong standard and to examine its historical sources.
Those provisions are limited in application and are not implicated by the Disclosure Act. However, all statutes with retroactive elements, including the Disclosure Act, are subject to scrutiny under the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution and the parallel provision of the New Jersey Constitution. U.S. Const. amend. XIV, § 1; N.J. Const. art. 1, ¶ 1. In prior cases, as noted, we have performed our due process analysis by asking whether retroactive application would interfere with a “vested right.” State Troopers, supra, 149 N.J. at 54; Phillips, supra, 128 N.J. at 620.
Although the term “vested right” is a familiar one in the law, our courts have had difficulty in providing a clear and consistent definition of that term in the specific context of legislative retroactivity. This Court's most commonly cited definition _ “a present fixed interest which . . . should be protected against arbitrary state action,” Pennsylvania Greyhound Lines v. Rosenthal, 14 N.J. 372, 384 (1954) - fairly can be viewed as imprecise. Recently, we departed from the Pennsylvania Greyhound Lines definition and construed “vested right” by reference to the impact of retroactive application on the disadvantaged party, noting that retroactive application generally does not violate due process unless the consequences are “particularly harsh or oppressive.” Twiss, supra, 124 N.J. at 469-70 (quoting Ventron, supra, 94 N.J. at 499). Other opinions yet have sought to define the term “by stating what a 'vested right' is not: 'There can be no vested right in the continued existence of a statute or rule of the common law which precludes its change or repeal.'” Phillips, supra, 128 N.J. at 620 (quoting Savarese v. New Jersey Auto. Full Ins. Underwriting Ass'n, 235 N.J. Super. 298, 309 (App. Div. 1989); see also Levin v. Township of Livingston, 62 N.J. Super. 395, 404 (Law Div. 1960), aff'd in part, rev'd in part, 35 N.J. 500 (1961) (declaring that “mere expectation as may be based upon an anticipated continuance of the present general laws” does not constitute a “vested right”).
The difficulty in defining the term “vested right” may reflect ambiguities inherent in that term. As Sutherland notes: Writers who have analyzed the principle (retroactivity) under consideration, both in light of its historical aspects and contemporary decisions agree that neither the principle nor its off-spring, 'vested rights,' can be defined in terms which require only the application of logic to reach the right conclusion in a particular case.
[Norman J. Singer, Sutherland Statutory Construction § 41.05 at 375 (5th ed. 1992) (quotations omitted).]
Perhaps as a consequence, we noted in Phillips v. Curiale, supra, that “'[d]iscerning commentators and judges' have questioned the value of the vested rights analysis.” Phillips, supra, 128 N.J. at 621 (quotations omitted). See James L. Kainen, The Historical Framework for Reviving Constitutional Protection for Property and Contract Rights, 79 Cornell L. Rev. 87, 102-03 (1993) (noting that “[t]he modern analysis treats the notion of vested rights as vacuous”); Charles B. Hochman, The Supreme Court and the Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. 692, 696 (1960) (“[I]t has long been recognized that the term 'vested right' is conclusory - a right is vested when it has been so far perfected that it cannot be taken away by statute.”); Ray H. Greenblat, Judicial Limitations on Retroactive Civil Legislation, 51 N.W. U. L. Rev. 540, 561 (1956) (noting that “the vested rights approach is stultifying, for judicial analysis seems to end with scrutiny of the right”). The “vested rights” language must be understood in context. As one commentator has noted, principles of non-retroactivity played “a central role in the constitutional protection of property and contract rights” prior to the advent of substantive due process in Lochner v. New York, 198 U.S. 45, 25 S. Ct. 539, 49 L. Ed. 937 (1905). Kainen, supra, 79 Cornell L. Rev. at 103. Some protection was afforded through the United States Constitution by means of an expansive interpretation of the Contract Clause. See, e.g., Piqua Branch of the State Bank of Ohio v. Knoop, 16 How. 369, 14 L. Ed. 977 (1853) (striking statute repealing tax exemption); Fletcher v. Peck, 6 Cranch 87, 3 L. Ed. 162 (1810) (invalidating state statute that revoked prior statutory allocation of land). It was state constitutional law, however, and the equitable power of state courts that formed the basis of constitutional non-retroactivity jurisprudence. Kainen, supra, 79 Cornell L. Rev. at 107 (noting that state constitutional provisions “were interpreted to fill in the gaps by providing protection for vested rights against retrospective legislation that the federal constitution did not”); see also Thomas M. Cooley, A Treatise on the Limitations Which Rest Upon the Legislative Power of the States in the American Union 353 (2d ed. 1871) (collecting state non-retroactivity decisions and constitutional provisions). States in the nineteenth century employed a variety of textual sources to protect vested rights. As Cooley noted, “the phrase 'due process (or course) of law' is sometimes used, and sometimes 'the law of the land,' and in some cases both; but the meaning is the same in every case.” Cooley, supra, at 353. Our early cases do not specify the textual source of the constitutional “vested rights” protection. It was not until 1941 that the Court of Errors and Appeals identified the “vested rights” protection as flowing from the Due Process Clause of the United States Constitution and the corresponding provision in Article 1, Section 1 of the New Jersey Constitution. Veix v. Seneca Building & Loan Ass'n of Newark, 126 N.J.L. 314, 317 (E & A 1941). The variety _ and in some cases the absence _ of textual sources for the non-retroactivity doctrine compelled courts to formulate some qualifying principle for the exercise of judicial review of legislative retroactivity. The “vested rights” doctrine was that limitation. “In effect, the doctrine of vested rights narrowed the proscription against retroactive interference with economic rights, thereby preventing retroactivity from becoming an all-inclusive limitation that would effectively freeze the existing legal regime of contract and property rules.” Kainen, supra, 79 Cornell L. Rev. at 105.
However, the vested rights doctrine was never an element of federal due process law. Until the United States Supreme Court's decision in Lochner, supra, the Due Process Clause was not construed to impose an independent restraint on retroactive laws. Although in the three decades after Lochner the Due Process Clause was held to impose limits on retroactive legislation, see, e.g., Railroad Retirement Bd. v. Alton R. Co., 295 U.S. 330, 55 S. Ct. 758, 79 L. Ed. 1468 (1935) (voiding law requiring company to establish pension fund for employees whose tenure with company ended prior to passage of law); Nichols v. Coolidge, 274 U.S. 531, 47 S. Ct. 710, 71 L. Ed. 1184 (1927) (invalidating retroactive application of tax law), the decisions from that era were not directed by a search for “vested rights,” and the principles that did appear in those decisions were relaxed in subsequent cases. See, e.g., Ferguson v. Skrupa, 372 U.S. 726, 731, 83 S. Ct. 1028, 1031, 10 L. Ed.2d 93, 97 (1963) (noting Supreme Court's “abandonment of the use of the 'vague contours' of the Due Process Clause to nullify laws which a majority of the Court believes to be economically unwise”) (footnote omitted).
As we will explain below, the “vested rights” doctrine does not reflect the current understanding of anti-retroactivity principles implicit in the concept of due process. A consistent line of decisions by the United States Supreme Court interpreting the Due Process Clause of the Fourteenth Amendment holds that retroactive legislation does not deprive parties of due process if the legislation “is supported by a legitimate legislative purpose furthered by rational means.” Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 729, 104 S. Ct. 2709, 2717-18, 81 L. Ed.2d 601, 611 (1984). Those decisions do not engage in a “vested rights” inquiry. The standard they apply _ the familiar “rational basis” test - is the same standard that is applied to legislation generally when challenged on due process grounds.
The principal contemporary decision on the due process implications of retroactive legislation is Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 96 S. Ct. 2882, 49 L. Ed.2d 752 (1976). In Usery, the Supreme Court upheld the retroactive effects of the Federal Coal Mine Health and Safety Act of 1969, as amended by the Black Lung Benefits Act of 1972, against the industry's claim that the retroactive application of the statute violated due process. Under Title IV of that Act, coal mine operators were required to compensate former employees disabled by pneumoconiosis even though those employees had terminated their work in the industry before the Act was passed.
Citing a string of post-Lochner cases, the Usery Court found it “well established that legislative Acts adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality.” Id. at 15, 96 S. Ct. at 2892, 49 L. Ed. 2d at 752, (citing Ferguson v. Skrupa, supra, 372 U.S. at 731, 83 S. Ct. at 1031, 10 L. Ed. 2d at 97; Williamson v. Lee Optical Co., 348 U.S. 483, 487-88, 75 S. Ct. 461, 99 L. Ed. 563 (1955)). The Court emphasized that “[i]t does not follow . . . that what Congress can legislate prospectively it can legislate retrospectively. The retroactive aspects of legislation, as well as the prospective aspects, must meet the test of due process, and the justifications for the latter may not suffice for the former.” Id. at 16-17, 96 S. Ct. at 2893, 49 L. Ed. 2d at 752. Nevertheless, the standard of review enunciated by the Court was the deferential “rational basis” standard applied to economic legislation generally: “the burden is on one complaining of a due process violation to establish that the legislature has acted in an arbitrary and irrational way.” Id. at 15, 96 S. Ct. at 2892, 49 L. Ed. 2d at 752.
The standard enunciated in Usery has been applied consistently by the United States Supreme Court in subsequent cases. Eastern Enterprises v. Apfel, 524 U.S. 498, 540, 118 S. Ct. 2131, 2154, 141 L. Ed.2d 451, 486 (1998) (Kennedy, J., concurring); United States v. Carlton, 512 U.S. 26, 31, 114 S. Ct. 2018, 2022, 129 L. Ed.2d 22, 28 (1994); General Motors Corp., supra, 503 U.S. at 191, 112 S. Ct. at 1111, 117 L. Ed. 2d at 340; United States v. Sperry Corp., 493 U.S. 52, 64-65, 110 S. Ct. 387, 396, 107 L. Ed.2d 290, 304 (1989); National R.R. Passenger Corp. v. Atchison Topeka and Santa Fe Ry. Co., 470 U.S. 451, 472, 105 S. Ct. 1441, 1455, 84 L. Ed.2d 432, 450 (1985); Pension Benefit Guaranty Corp., supra, 467 U.S. at 729, 104 S. Ct. at 2717-18, 81 L. Ed. 2d at 611. Consistent with those decisions, we are disinclined to pursue a “vested rights” inquiry in determining whether Section 10(c) of the Disclosure Act violates Plaintiffs' rights under the Due Process Clause. Accordingly, in place of the “vested rights” inquiry we will apply rational basis scrutiny, as that standard has been articulated by the United States Supreme Court in its contemporary legislative retroactivity decisions. If Section 10(c) “is supported by a legitimate legislative purpose furthered by rational means,” Pension Benefit Guaranty Corp., supra, 467 U.S. at 729, 104 S. Ct. at 2717-18, 81 L. Ed. 2d at 611, it will withstand a due process challenge.
We find the constitutional question under the Usery standard to be a close one. The retroactivity provision suggests a conclusion on the part of the Legislature that the public interest in protecting real estate sellers and developers from consumer fraud claims under the standard we enunciated in Strawn, supra, 104 N.J. at 65, outweighed the interests of homeowners in a remedy for the non-disclosure of off-site conditions affecting the value of their properties. On the other hand, the disclosure scheme created in Sections 6, 8 and 9 of the Disclosure Act reaffirms the basic principle of Strawn - that home purchasers are entitled to disclosure of information respecting off-site conditions that may affect the value of their properties. It is difficult to conceive of a rationale to explain why plaintiffs should be deprived of a protection that they would have enjoyed if they either resolved their claims before or purchased their properties after the Disclosure Act was implemented. Although our constitutional review is a limited one, see Eastern Enterprises, supra, 524 U.S. at 550, 118 S. Ct. at 2159, 141 L. Ed. 2d at 488 (Kennedy, J., concurring) (“Statutes may be invalidated on due process grounds only under the most egregious of circumstances.”), the argument that Section 10(c) produced an “arbitrary and irrational” result, Usery, supra, 428 U.S. at 15, 96 S. Ct. at 2892, 49 L. Ed. 2d at 752, has merit.
We need not, however, resolve the constitutional question in this appeal. As noted, notwithstanding the absence of a constitutional violation, we may decline to apply a statute retroactively if retroactive application would result in “manifest injustice.” Because, as we will discuss, we find a clear manifest injustice in the retroactive application of the Disclosure Act in this case, we decline to resolve the much closer constitutional question.
The concern that is implicated by the standard of “manifest injustice” in assessing the retroactive application of a statute need not reach constitutional levels. Hence, while our inquiry into whether there has been a “manifest injustice” is informed by our consideration of issues of constitutional due process, it is not necessarily determined by those issues.
[In re D.C., supra, 146 N.J. at 58.]
See also State Troopers, supra, 149 N.J. at 54 (noting that “manifest injustice analysis is a nonconstitutional, equitable doctrine designed to prevent unfair results that do not necessarily violate any constitutional provision”).
We have discussed the historical growth of the legal tradition against retroactivity. In large part, that tradition has developed from equitable principles. See 1 J. Kent, Commentaries on American Law 455 (2d ed. 1832) (noting that rule against retroactive application was “founded not only in English law, but on the principles of general jurisprudence.”). We made explicit the equitable element of our retroactivity jurisprudence two decades ago in Gibbons v. Gibbons, supra, 86 N.J. at 523-25. There, we upheld the retroactive application of an amendment to the divorce statute, N.J.S.A. 2A:34-23. After determining that the statute was otherwise subject to retroactive application, we defined the scope of the “manifest injustice” inquiry as follows:
[T]he essence of this inquiry is whether the affected party relied, to his or her prejudice, on the law that is now to be changed as a result of the retroactive application of the statute, and whether the consequences of this reliance are so deleterious and irrevocable that it would be unfair to apply the statute retroactively.
[Id. at 523-24.]
We found in Gibbons that there was no manifest injustice because the statute allowed orders pertaining to alimony or other support to be revised “as circumstances may require.” Id. at 525 (quoting N.J.S.A. 2A:34-23).
Unlike the “vested rights” analysis, we have experienced no unique difficulty defining the contours of the manifest injustice standard, and we reaffirm that standard today. We have applied the manifest injustice analysis sparingly in prior cases, incorporating it to defeat application of a retroactive law only once. State Troopers, supra, 149 N.J. at 56 (finding manifest injustice in retroactive application of administrative regulation amending back-pay rule because of “reasonable reliance” by employees on pre-amendment rule in determining when to retire or resign from employment). Given the unique circumstances of this case, however, we are compelled to conclude that applying the Disclosure Act retroactively to bar plaintiffs' claims would constitute manifest injustice.
The manifest injustice analysis requires “a weighing of the public interest in the retroactive application of the statute against the affected party's reliance on previous law, and the consequences of that reliance.” Nelson v. Board of Educ. of Tp. of Old Bridge, 148 N.J. 358, 371 (1997). Edison Glen argues that plaintiffs did not “rely” on the law that was changed by the Disclosure Act because plaintiffs purchased their properties prior to our decision in Strawn, supra. We ag