SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-0382-95T5
GEI INTERNATIONAL CORPORATION,
a New Jersey corporation
(formerly known as ANDREW DENHOLM,
INC.),
Plaintiff-Appellant,
v.
ST. PAUL FIRE AND MARINE INSURANCE
COMPANY, FEDERAL INSURANCE COMPANY,
ATLANTIC MUTUAL INSURANCE COMPANY,
NORTHWESTERN NATIONAL INSURANCE
COMPANY, MIDLAND INSURANCE COMPANY,
CHUBB GROUP OF INSURANCE COMPANIES,
FIREMAN'S FUND INSURANCE COMPANY, INC.,
IDEAL MUTUAL INSURANCE COMPANY, INC.,
ORB HOLDING COMPANY, JOHN BLACK,
ROBERT DEDERER, FRANK VANDERHOOF, METRA-
MATIC CORPORATION, and NEW JERSEY
PROPERTY/LIABILITY GUARANTY ASSOCIATION,
Defendants,
and
HI-SPEED CHECKWEIGHER, INC.,
successor in interest to
METRAMATIC CORPORATION, and
AG fur PRAZIONSINSTRUMENTE,
Defendants-Respondents.
________________________________________
Argued January 11, 1996 - Decided February 16, 1996
Before Judges Baime, Villanueva, and Kimmelman.
On appeal from the Superior Court of New
Jersey, Law Division, Morris County.
Robert Mahoney argued the cause for
appellant GEI International Corporation
(Friedman Siegelbaum, attorneys; James M.
Andrews and Mr. Mahoney, on the brief).
Michael Dore argued the cause for
respondents Hi-Speed Checkweigher,
Inc. and AG fur Prazionsinstrumente
(Lowenstein, Sandler, Kohl, Fisher &
Boylan, attorneys; Mr. Dore, of counsel
and on the brief; Lauren M. Hollender,
on the brief).
The opinion of the court was delivered by
KIMMELMAN, J.A.D. (temporarily assigned).
In this toxic tort litigation, the issues of which have been
bifurcated for trial, plaintiff seeks (1) contribution from certain
named defendants for its cleanup costs (the liability trial) and
(2) a declaratory judgment against the insurance company defendants
to determine and enforce coverage under several policies (the
coverage trial). The trial court struck plaintiff's demand for a
jury trial on both of the bifurcated issues. Pursuant to R. 2:2-4,
we granted plaintiff's application for leave to appeal from that
interlocutory ruling.
Although defendants Hi-Speed Checkweigher, Inc. (Hi-Speed) and
AG fur Prazionsinstrumente (AG) in their answer did demand a trial
by jury, their demand was obviously withdrawn when said defendants
Hi-Speed and AG successfully moved to strike plaintiff's demand for
a trial by jury in the liability trial.
In addition to plaintiff's jury demand, the defendant
insurance companies, in their answers, also demanded a trial by
jury. The trial court additionally struck all such demands by said
defendants for a trial by jury by ordering a separate bench trial
on the insurance coverage issues. It was further ordered that the
verdict to be rendered in the liability trial assigning liability
amongst the various parties would be binding upon the insurance
company defendants. The insurance company defendants have not
appealed the trial court's ruling and have neither entered
appearances nor responded with respect to this appeal.
Defendants Orb Holding Company, John Black, Robert Dederer,
and Frank Vanderhoof (sometimes hereinafter referred to as Orb or
the Orb defendants) also demanded a trial by jury in their answer,
cross-claims, and third-party complaint seeking to compel coverage
under policies of insurance issued to them. Their demand is
regarded as having been likewise stricken by virtue of the
foregoing orders. They, too, have not appealed the trial court's
ruling and have neither entered appearances nor responded with
respect to this appeal.
Factually, this action relates to the apportionment of
environmental remediation costs incurred and to be incurred by
plaintiff in connection with an industrial site located in Landing
(Roxbury Township), New Jersey. Defendant Metramatic Corporation
(Metramatic) operated a manufacturing facility on the site from
1969 to March 1983. Defendants Black, Dederer, and Vanderhoof
owned Metramatic during this period. Defendant Orb, a general
partnership composed of Black, Dederer, and Vanderhoof, owned the
site itself. In March 1983, Orb transferred title to the real
estate to Metramatic, and plaintiff purchased the capital stock of
Metramatic.
Plaintiff continued with the operation of Metramatic at the
site in question until July 1988 when plaintiff sold the stock of
Metramatic to defendant AG. Metramatic was then merged into
defendant Hi-Speed, a subsidiary of AG.
Plaintiff's sale of the Metramatic stock to AG triggered the
Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6
to -14, which mandates the remediation of contaminated industrial
property upon transfer of ownership of or cessation of the
operations conducted thereon. By subsequent amendment, ECRA is now
known as the Industrial Site Recovery Act (ISRA), N.J.S.A. 13:1K-6
to -14. Compliance with ECRA required plaintiff to conduct a full
investigation to determine the possible existence of hazardous
contamination and the necessity for environmental remediation of
the site. N.J.S.A. 13:1K-9. The investigation revealed
contamination. In order for the sale of Metramatic's stock to be
consummated before the cleanup of the site could take place, it was
necessary for plaintiff to enter into an administrative consent
order (ACO) with the New Jersey Department of Environmental
Protection. Plaintiff has undertaken the cleanup of the toxic
contamination found on the site in compliance with the terms of the
ACO and to date has incurred costs, we are informed, in excess of
$2,000,000. The cleanup work continues.
Plaintiff has brought this action against Hi-Speed and AG, as
successors to Metramatic, and the Orb defendants, the prior owners
of the site, for the recovery of plaintiff's remediation costs from
said defendants by way of contribution.
Whenever one or more dischargers or
persons cleans up and removes a discharge of a
hazardous substance, those dischargers and
persons shall have a right of contribution
against all other dischargers and persons in
any way responsible for a discharged hazardous
substance who are liable for the cost of the
cleanup and removal of that discharge of a
hazardous substance. In an action for
contribution, the contribution plaintiffs need
prove only that a discharge occurred for which
the contribution defendant or defendants are
liable pursuant to the provisions of
subsection c. of section 8 of P.L.1976, c. 141
(C.58:10-23.11g), and the contribution
defendant shall have only the defenses to
liability available to parties pursuant to
subsection d. of section 8 of P.L.1976, c. 141
(C.58:10-23.11g). In resolving contribution
claims, a court may allocate the costs of
cleanup and removal among liable parties using
such equitable factors as the court determines
are appropriate.
[Emphasis added.]
The emphasized portion of the subsection above set forth does
not specifically authorize a jury to allocate the costs of cleanup.
A "court" is so authorized to make the allocation, but the question
for decision is whether the language used by the Legislature was
meant to preclude a trial by jury.
We find instructive to the determination of this question the
reasoning of the Supreme Court in Shaner v. Horizon Bancorp.,
116 N.J. 433, 443 (1989), in which the Court considered whether the
Legislature intended a trial by jury with respect to an action
brought under the New Jersey Law Against Discrimination, N.J.S.A.
10:5-1 to -42 (LAD). The Court in that case said:
The fact that the 1979 amendment did not deal expressly with the right to trial by jury is also highly indicative of legislative intent not to confer such a right. It is reasonable to believe that if the Legislature intended to confer the right to a jury trial when in 1979 it authorized a complainant to bring an action in Superior Court, it would have expressly so provided in its amendment of the LAD. When conferring a right to a jury trial for newly-created statutory causes of action, the Legislature has a history of doing so by express provision. See, e.g., N.J.S.A. 2A:15-56 (labor dispute injunctions); N.J.S.A. 2A:62-4, 2A:62-18 (quiet-title actions); N.J.S.A. 2A:62-21 (actions to determine the existence and validity of covenants, conditions, agreements, or restrictions in deeds to real estate); N.J.S.A. 2A:62-24 (actions to determine title to riparian lands and lands under water); N.J.S.A. 3B:12-24 (civil proceedings to determine mental incompetency); N.J.S.A. 40:189-3 (actions for abatement of nuisances); and N.J.S.A. 45:14B-42 (actions regarding confidentiality of patient information by psychologists); see also State v. Tenriero, 183 N.J. Super. 519, 521 (Law Div. 1981) (plaintiff denied a right to jury trial in action brought under statute that provided Superior Court with jurisdiction
over gambling offenses: "[h]ad the
Legislature intended otherwise, it would have
made provision in the same manner as for the
disorderly persons obscenity offense.")
[Id. at 443.]
In New Jersey, as in other jurisdictions, the right to trial
by jury remains inviolate, N.J. Const. art. I, ¶ 9, but inviolate
only with respect to causes of action that were triable by jury at
common law. "[T]he Court has been consistent in denying a right to
jury trial unless that right existed prior to the adoption of the
State Constitution." Shaner, supra, 116 N.J. at 447. Whether
reference is made to the 1947, 1844, or 1776 Constitutions is
immaterial to the within matter. There is no doubt that
environmental cleanup litigation relative to the apportionment of
remediation costs was unknown at common law. The trial court
correctly noted such absence from the fabric of the common law as
it existed in 1776. The Spill Act is a newly-created statutory
right and the Legislature by its enactment did not codify nor could
it have codified a common law right that did not pre-exist.
Again, in Shaner, supra, 116 N.J. at 448-49, the Court said:
Montclair v. Stanoyevich, [
6 N.J. 479
(1951)], was the first decision by this Court
to find no right to jury trial existed for
newly-created statutory rights. This case
involved a petty criminal offense before a
magistrate involving violation of a zoning
ordinance. The Court found that convictions
before magistrates for small criminal offenses
were unknown at common law, and therefore the
defendant had no right to a jury trial. Since
then, lower courts have been consistent in
denying a right to jury trial for newly-created statutory causes of action. See N.J.
Sports & Exposition Auth. v. Del Tufo,
210 N.J. Super. 664 (Law Div. 1986), aff'd, 230
N.J. Super. 616 (App. Div. 1989) (no right to
jury trial in stockholders' action to
determine fair value of their shares because
proceeding was statutory rather than
contractual); Manetti v. Prudential Property &
Casualty Ins. Co.,
196 N.J. Super. 317, 320-21
(App. Div. 1984) (no right to jury trial for
statutorily-created "PIP" benefits, which are
granted according to principles of statutory
construction, not contract); State v.
Tenriero, . . . ,
183 N.J. Super. 519 (no
right to jury trial for gambling offenses
under statute giving jurisdiction to Superior
Court); Van Dissel v. Jersey Cent. Power &
Light Co.,
181 N.J. Super. 516 (App. Div.
1981) (no right to jury trial for inverse
condemnation action since this right arises
under state Constitution and statute, and is,
therefore, foreign to the common law), certif.
den.,
89 N.J. 409 (1982), granted and vacated
on other grounds,
465 U.S. 1001,
104 S. Ct. 989,
79 L. Ed.2d 224, on remand,
194 N.J.
Super. 108, 122-23 (App. Div.) (conclusion on
jury issue undisturbed), certif. denied,
99 N.J. 186 (1984); Peterson v. Albano,
158 N.J.
Super. 503 (App. Div. 1978) (no right to jury
trial in summary dispossess action because it
is statutory), certif. den.,
78 N.J. 337
(1978); Quinchia v. Waddington,
166 N.J.
Super. 247, 249 (Law Div. 1979) (no right to
jury trial to recover from Unsatisfied Claim
and Judgment Fund since right was new
substantive right that vested by statute and
was foreign to the common law; "[a]bsent
legislative mandate, the right of trial by
jury is confined to those matters in which it
existed under the common law."); Kugler v.
Banner Pontiac-Buick, Opel, Inc.,
120 N.J.
Super. 572 (Ch. Div. 1972) (no right to jury
trial for prosecution under Consumer Fraud Act
where statutory action was "completely
unknown" to common law).
Following Shaner, supra, this court held that a claim under the New Jersey Antitrust Act, N.J.S.A. 56:9-1 to -19, was not subject to trial by jury because the features of the Act were virtually unknown at common law. Boardwalk Properties, Inc. v. BPHC Acquisition, Inc., 253 N.J. Super. 515, 529-530 (App. Div.
1991).
Apart from the lack of common law underpinning for the cause
of action that plaintiff here asserts in the liability trial, it
would appear that the language used by the Legislature clearly
intended a court to make an equitable determination without a jury
trial. In resolving contribution claims under the Spill Act, a
"court" is the instrumentality intended by the Legislature to
allocate the costs of cleanup "among liable parties using such
equitable factors as the court determines are appropriate."
N.J.S.A. 58:10-23.11f(a)(2). It is the court which is the
instrumentality intended to utilize equitable factors.
Historically, juries were not intended to determine equitable
factors relative to a decision. "A jury is clearly incompetent to
frame and deliver a decree according to the doctrines and methods
of equity." 1 John N. Pomeroy, Equity Jurisprudence § 116 (Spencer
W. Symons ed., 5th ed. 1941).
Under the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA),
42 U.S.C.A.
§§9601-9675, a federal act
substantially similar to the Spill Act, Congress used language
nearly identical to the language later used in the Spill Act when
it established the right of a person paying cleanup costs to seek
contribution. The relevant provision of CERCLA, 42 U.S.C.A. §
9613(f)(1), provides:
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a). . . . Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal
law. In resolving contribution claims, the
court may allocate response costs among liable
parties using such equitable factors as the
court determines are appropriate. . . .
[Emphasis added.]
The United States District Court for the District of New
Jersey, in denying the right to a jury trial under CERCLA where a
plaintiff sought contribution from potentially liable persons, held
that the cause of action for contribution of remediation costs was
unknown at common law and that Congress, by use of the above-quoted
statutory language, intended only a bench trial to determine the
equitable factors appropriate to govern the right to contribution.
Hatco Corp. v. W.R. Grace & Co. - Conn.,
859 F. Supp. 769, 774-75
(D.N.J. 1994), aff'd, 59 F.3d 400 (3d Cir. 1995). In affirming the
District Court, the Third Circuit emphasized that the doctrine of
contribution was an historic equitable remedy not triable by jury.
59 F.
3d at 412-13.
It is clear to us that plaintiff's additional claims for
common law contribution and indemnification and strict liability in
tort are ancillary and incidental to plaintiff's claim for
contribution under the Spill Act. The Spill Act does preserve the
right of a party to seek contribution under common law, N.J.S.A.
58:10-23.11f(a)(3), but by bringing such claim within the context
of a Spill Act action for contribution, such claim, irrespective of
whether it is a legal or equitable claim, becomes ancillary and
incidental to the main cause of action. Traditionally, a court of
equity, sitting without a jury, has the power to hear and dispose
of legal issues which are ancillary and incidental to the principal
dispute. Weintraub v. Krobatsch,
64 N.J. 445, 455 (1974); Steiner
v. Stein,
2 N.J. 367, 378-79 (1949); Fleisher v. James Drug Stores,
1 N.J. 138, 150 (1948); see also Mantell v. Int'l Plastic Harmonica
Corp.,
141 N.J. Eq. 379, 393 (E. & A. 1947).
We do not regard our recent decision in Bahrle v. Exxon Corp.,
279 N.J. Super. 5 (App. Div. 1995), certif. granted, Bahrle v.
Texaco Corp.,
140 N.J. 326 (1995), to affect the result we here
reach. In Bahrle, although there was a jury trial with respect to
private claims brought under the Spill Act, the jury issue was not
the subject of the appeal nor was it argued before this court.
respective policies. Such an action is for the court and not for
a jury. Ballard v. Schoenberg,
224 N.J. Super. 661, 668 (App.
Div.), certif. denied,
113 N.J. 367 (1988); see also Eckerd Drugs
of N.J., Inc. v. S.R. 215, Rite-Aid Corp.,
170 N.J. Super. 37, 40
(App. Div. 1979); Morton Intern. v. Gen. Acc. Ins. Co. of Am.,
266 N.J. Super. 300, 307 (App. Div. 1991), aff'd,
134 N.J. 1 (1993),
cert. denied, Ins. Co. of N. Amer. v. Morton Intern., Inc., ____
U.S. ____,
114 S. Ct. 2764,
129 L. Ed.2d 878 (1994).
Morton involved extensive litigation concerning claims for
insurance coverage brought by the filing of a complaint for
declaratory judgment in the Chancery Division seeking indemnity for
environmental remediation expenses. Writing for this court, Judge
King significantly observed: "The decision was essentially a legal
one for the judge." Morton, supra, 266 N.J. Super. at 307.
The coverage trial may depend to an extent on certain fact
issues. We regard the existence of one or more factual issues upon
which coverage may depend, such as whether the contamination on the
site occurred intentionally or accidentally, as issues ancillary
and incidental to and subsumed within the main cause of action for
equitable relief in the coverage trial. As stated previously and
applicable to the coverage trial as well, the constitutional right
to a trial by jury is subject to the inherent equitable
jurisdiction to adjudicate ancillary and incidental matters germane
to the subject matter of the equitable jurisdiction. Steiner,
supra, 2 N.J. at 378-79; Fleischer, supra, 1 N.J. at 150; Boardwalk
Properties, supra, 253 N.J. Super. at 527; see also Mantell, supra,
141 N.J. Eq. at 393.
The orders of July 28, 1995, and August 4, 1994, striking the
demands for trial by jury in the liability trial and in the
coverage trial, respectively, are affirmed substantially for the
reasons expressed by Judge Stanton in his oral opinion of July 28,
1995, as herein supplemented.