Find Laws Find Lawyers Free Legal Forms USA State Laws
Laws-info.com » Cases » New Jersey » Appellate Court » 2012 » LAWRENCE J. DALTON v. SHANNA LYNN CORPORATION
LAWRENCE J. DALTON v. SHANNA LYNN CORPORATION
State: New Jersey
Court: Court of Appeals
Docket No: a0048-10
Case Date: 04/19/2012
Plaintiff: LAWRENCE J. DALTON
Defendant: SHANNA LYNN CORPORATION
Preview:a0048-10.opn.html

N.J.S.A. 2A:35A-1 to -14, and the Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to 23.24, in connection with the failure of an underground fuel oil storage tank on the property acquired by them in 1988 from the Shanna Lynn defendants. Plaintiffs also sought damages from defendants for negligence, breach of contract, breach of the duty of good faith and fair dealing, consumer fraud, fraud, and equitable fraud. They appeal an order granting partial summary judgment in favor of defendants that dismissed their ERA and Spill Act claims, as well as the order dismissing their equitable fraud claim pursuant to Rule 4:37-2b. We affirm in part, reverse in part and remand for further proceedings. In August 1988, plaintiffs purchased the Rainbow Inn from the Shanna Lynn defendants. Immediately following the closing, the Shanna Lynn defendants received notice from Lerco that the underground oil tank had failed. Defendants did not inform plaintiffs. It was not until 1997, after a fire destroyed the Rainbow Inn and plaintiffs commenced rebuilding the inn, that an excavator informed plaintiff Lawrence Dalton that he had discovered black sludge in the ground that smelled like oil. "> Original Wordprocessor Version (NOTE: The status of this decision is Unpublished.) Original Wordprocessor Version (NOTE: The status of this decision is Unpublished.)

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0048-10T1 A-1944-10T1

LAWRENCE J. DALTON and CHRISTINE M. DALTON,

Plaintiffs-Appellants,

vs.

SHANNA LYNN CORPORATION, LYNSEY, INC., LOUIS W. GARMAN, SR., THE ESTATE OF THERESA MADERICH, JOSEPH

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

MADERICH, AGNES MADERICH, VIRGIL ANN MADERICH, and HENRY MADERICH,

Defendants-Respondents.

___________________________________

LAWRENCE J. DALTON and CHRISTINE M. DALTON,

Plaintiffs-Appellants,

vs.

SHANNA LYNN CORPORATION, LOUIS W. GARMAN, SR., THERESA MADERICH, JOSEPH MADERICH, AGNES MADERICH, VIRGIL ANN MADERICH, HENRY MADERICH, and LERCO FUEL OIL COMPANY,

Defendants-Respondents.

April 19, 2012 Argued: September 21, 2011 - Decided:

Before Judges Cuff, Waugh, and St. John.

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

On appeal from Superior Court of New Jersey, Law Division, Gloucester County, Docket Nos. L-516-10 and L-1046-99.

Louis Giansante argued the cause for appellants (Giansante & Cobb, LLC, attorneys; Mr. Giansante, of counsel and on the briefs).

Betsy G. Ramos argued the cause for respondents Shanna Lynn Corp., Lynsey, Inc., Louis Garman, Sr., Estate of Theresa Maderich, Theresa Maderich, Joseph Maderich, Agnes Maderich, Virgil Ann Maderich, and Henry Maderich (Capehart & Scatchard, P.A., attorneys; Ms. Ramos, on the brief).

John G. Koch argued the cause for respondent Lerco Fuel Oil Company, Inc., f/k/a Woodruff-Marcacci Fuel Co., Inc. (Flaster/Greenberg P.C., attorneys; Mitchell H. Kizner and Mr. Koch, on the brief).

PER CURIAM Plaintiffs Lawrence J. Dalton and Christine M. Dalton filed a complaint against defendants Shanna Lynn Corporation and its individual shareholders Louis W. Garman, Sr., Theresa Maderich, Joseph Maderich, Agnes Maderich, Virgil Ann Maderich and Henry Maderich (the Shanna Lynn defendants), and defendant Lerco Fuel Oil Company alleging violations of the Environmental Rights Act (ERA), N.J.S.A. 2A:35A-1 to -14, and the Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24, in connection with the failure of an underground fuel oil storage tank on the property acquired by them in 1988 from the Shanna Lynn defendants. Plaintiffs also sought damages from defendants for negligence, breach of contract, breach of the duty of good faith and fair dealing, consumer fraud, fraud, and equitable fraud. They appeal an order granting partial summary judgment in favor of defendants that dismissed their ERA and Spill Act claims, as well as the order dismissing their equitable fraud claim pursuant to Rule 4:37-2b. We affirm in part, reverse in part and remand for further proceedings. In August 1988, plaintiffs purchased the Rainbow Inn from the Shanna Lynn defendants. Immediately following the closing, the Shanna Lynn defendants received notice from Lerco that the underground oil tank had failed. Defendants did not inform plaintiffs. It was not until 1997, after a fire destroyed the Rainbow Inn and plaintiffs commenced rebuilding the inn, that an excavator informed plaintiff Lawrence Dalton that he had discovered black sludge in the ground that smelled like oil.

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

On January 4, 1999, plaintiffs issued a Notice of Suit to be commenced under the Spill Act and the ERA. Plaintiffs served the notice on defendants, the Attorney General of the State of New Jersey, and the Commissioner of Environmental Protection. Plaintiffs filed their complaint on June 8, 1999. In response to cross-motions for summary judgment in December 2002, a judge dismissed all plaintiffs' claims against Lerco, dismissed claims under the ERA, the Solid Waste Act, the Clean Water Act, the Spill Act, and the Consumer Fraud Act (Counts I-V), and a negligence claim (Count VIII) against Shanna Lynn Corporation. Thereafter, the remaining breach of contract and fraud claims against the Shanna Lynn defendants were tried in March 2006. Following the conclusion of plaintiffs' case, the trial judge dismissed all but the equitable fraud claim due to the absence of any proof of damages. The judge sought further briefs on the remedies for equitable fraud, the remaining cause of action. He also dismissed the jury due to the equitable nature of the remaining claim. After a protracted period without a decision, plaintiffs filed a second complaint in 2010 seeking the same remedies for the 1988 oil spill. Plaintiffs appeal from two orders. The first order, dated July 22, 2010, granted summary judgment in favor of defendants and dismissed the 2010 complaint. The second order, dated November 15, 2010, dismissed the equitable fraud claim due to lack of an appropriate remedy to address the wrong done to plaintiffs by the Shanna Lynn defendants and entered final judgment in their favor. We consolidated these appeals by order dated February 8, 2011. On appeal, plaintiffs argue that the motion judge erred in 2002 when he dismissed their environmental claims. Plaintiffs also argue that the trial judge should have permitted them to serve a supplemental expert report in support of a claim that the contamination diminished the value of their property, and that the trial judge erred when he dismissed the equitable fraud claim. Finally, plaintiffs contend that their claims in the 2010 complaint were not barred by the disposition of their 1999 complaint, and that defendants have repeatedly certified to facts that are untrue and undermine the decisions rendered throughout this protracted litigation. Plaintiffs started to address the problem presented by the 1988 tank failure in 1999 following reconstruction of the building and resumption of business. Following service of the Notice of Suit and filing of the complaint, plaintiffs hired Marks Environmental, Inc. to perform a site investigation. Its November 2000 report concluded that the abandoned fuel oil tank was the source of the black sludge uncovered during

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

excavation for the new building and recommended two actions: first, a full site characterization study; and second, any required remediation. The study would determine the vertical and lateral extent of soil contamination and the existence of any groundwater contamination. Plaintiffs never conducted a full site characterization study.

I Initially, we address plaintiffs' appeal from the July 22, 2010 order dismissing their 2010 complaint. The 2010 complaint was a duplicate of the 1999 complaint, except for claims against Lynsey, Inc., a corporation funded in part by defendants from proceeds from the 1988 sale of the Rainbow Inn, and claims for concealment of property defects and nuisance. The motion judge held that defendant Lynsey was not a successor to defendant Shanna Lynn and had no liability for its acts or omissions. He also held that all claims in the 2010 complaint were barred by res judicata and the entire controversy doctrine. The doctrine of res judicata contemplates that when a controversy between parties is once fairly litigated and determined it is no longer open to relitigation. Where the second action is no more than a repetition of the first, the first lawsuit stands as a barrier to the second. The rule precludes parties from relitigating substantially the same cause of action.

[Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460 (1989) (citations and internal quotation marks omitted).] To benefit from this doctrine, the party asserting it must demonstrate: (1) the judgment in the prior action must be valid, final, and on the merits; (2) the parties in the later action must be identical to or in privity with those in the prior action; and (3) the claim in the later action must grow out of the same transaction or occurrence as the claim in the earlier one.

[Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 412 (1991).]

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

The entire controversy doctrine "'embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court; accordingly, all parties involved in a litigation should at the very least present in that proceeding all of their claims and defenses that are related to the underlying controversy.'" Highland Lakes Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125 (2009) (quoting Cogdell v. Hosp. Ctr. at Orange, 116 N.J. 7, 15 (1989)). Plaintiffs argue the claims they asserted in the second action are not barred by res judicata or the entire controversy doctrine because they are entirely new claims. They contend the claims asserted arose "after the plaintiffs had reported the spill to DEP, after Shanna Lynn had refused to investigate or clean up the oil spill and after being advised by its experts that the open case may give rise to additional damage claims . . . ." However, nothing has changed since plaintiffs filed their complaint in 1999, except for a motion granting partial summary judgment in favor of defendants and a trial at which all but the equitable fraud claim were dismissed. Moreover, plaintiffs have still not cleaned up the property. In short, the motion judge properly held that the bulk of the 2010 complaint was barred by principles of res judicata. Furthermore, the counts alleging property defects concealed by defendants (Count IV) and nuisance (Count VIII) should have been brought in the 1999 complaint. Each claim is related to the underlying controversy and nothing new occurred between the filing of the first and second complaints. Highland Lakes, supra, 201 N.J. at 125. Thus, they were properly barred by the entire controversy doctrine. II A major focus of plaintiffs' appeal is the December 2002 order granting partial summary judgment to the Shanna Lynn defendants dismissing the various claims founded on the Spill Act and the ERA. The motion judge held that plaintiffs could not seek contribution or indemnification because they had not performed any remediation of the property. Stated differently, plaintiffs could not invoke the remedies afforded by either statute until they had performed a voluntary or government-ordered cleanup of the property. Plaintiffs filed two notices of appeal. One notice states that plaintiffs seek review of the July 22, 2010 order dismissing their 2010 complaint. The other notice seeks review solely of the November 15, 2010 order entering final judgment in the 1999 complaint. Rule 2:5-1(f)(3)(A) provides that the notice of appeal "shall designate the judgment, decision, action or
1

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

rule, or part thereof appealed from . . . . " The comments to this rule note that "[w]hile the rule does not in terms so provide, it is clear that it is only the judgments or orders or parts thereof designated in the notice of appeal which are subject to the appeal process and review." Pressler & Verniero, Current N.J. Court Rules, comment 6.1 on R. 2:5-1 (2012). Here, plaintiffs do not refer to the December 2002 order granting partial summary judgment or to the February 24, 2005 order denying plaintiffs' motion to reinstate their Spill Act or ERA claims against the Shanna Lynn defendants and their motion to supplement their expert report. We, therefore, could hold that this court does not have jurisdiction over any argument pertaining to these earlier orders. We hesitate to adopt such a restrictive interpretation of the latter notice of appeal because of the language of the November 15, 2010 order. Although we believe this order pertains only to the breach of contract and fraud claims reserved for trial, a more expansive reading of the order is possible. Out of an abundance of caution, particularly in light of the protracted course of this litigation, we will address the 2002 partial summary judgment order and the 2005 order denying reinstatement of Spill Act and ERA claims. Plaintiffs argue that the motion judge erred when he held they had not provided proper notice to the Department of Environmental Protection (DEP) and that they were required to remediate their property before seeking relief under the ERA or the Spill Act from defendants. Plaintiffs emphasize that their pursuit of funds from the parties that owned the property at the time of the oil spill is entirely appropriate given the expense associated with cleanup efforts. The Shanna Lynn defendants argue that dismissal of the claims founded on the ERA and Spill Act was appropriate because plaintiffs failed to provide notice to the municipality as required by statute, and further argue that the ERA addresses continuing violations of the Spill Act and there is no threat of future violations by them. The ERA provides: Any person may commence a civil action in a court of competent jurisdiction against any other person alleged to be in violation of any statute, regulation or ordinance which is designed to prevent or minimize pollution, impairment or destruction of the environment. The action may be for injunctive or other equitable relief to compel compliance with a statute, regulation or ordinance, or to assess civil penalties for the violation as provided by law. The action may be commenced upon an allegation that a person is in violation, either continuously or intermittently, of a statute, regulation or ordinance, and that there is a likelihood that the violation will recur in the future.

[N.J.S.A. 2A:35A-4a.]
file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

The ERA "does not itself provide any substantive cause of action." Superior Air Prods. Co. v. NL Indus., Inc., 216 N.J. Super. 46, 58 (App. Div. 1987), appeal dismissed by 126 N.J. 308 (1991). Rather, it "grants a private person standing to enforce an environmental protection statute as an alternative to inaction by the government which retains primary prosecutorial responsibility." Ibid. As a statute that provides standing only, it is important that the party seeking to enforce others' obligations under other environmental protection statutes complies with the procedures established by the Legislature. One of those procedures is notice to the municipality in which the spill or discharge occurred and to the DEP. N.J.S.A. 2A:35A-11. The notice requirement has been held to be a mandatory condition precedent to commencing a private cause of action. Player v. Motiva Enters., LLC, 240 F. App'x 513, 524 (3d Cir. 2007). Here, plaintiffs supplied DEP with the requisite notice. The ERA only requires that DEP be provided with notice of "any action instituted pursuant to its authority . . . ." Twp. of Howell v. Waste Disposal, Inc., 207 N.J. Super. 80, 95 (App. Div. 1986). The notice is designed to permit the agency "to exercise value judgments in individual cases . . . [and] if the DEP expresses no interest and elects not to join that action, in the absence of a court ordering it to be made a party, . . . the action may proceed in accordance with the rights accorded in the [ERA]." Ibid. Providing notice to DEP only permits plaintiffs to file a complaint seeking injunctive or other equitable relief or the assessment of civil penalties against a party who is "in violation, either continuously or intermittently, of a statute, regulation or ordinance, and that there is a likelihood that the violation will recur in the future." N.J.S.A. 2A:35A-4a. Thus, we address whether plaintiffs are entitled to relief pursuant to the Spill Act. In 1991, the Legislature amended the Spill Act "to provide a cause of action to private plaintiffs to recover cleanup and removal costs for hazardous substances." Hous. Auth. of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2, 18 (2003). Thus, the Spill Act "provides for two causes of action: one to recover clean-up costs from dischargers (contribution claim), [N.J.S.A.] 58:10-23.11f(a)(2), and one to recover damages from the NJDEP, or Spill Compensation Fund, [N.J.S.A.] 58:10-23.11k." Bonnieview Homeowners Ass'n, LLC v. Woodmont Builders, L.L.C., 655 F. Supp.2d 473, 503 (D.N.J. 2009). This private cause of action provides: Whenever one or more dischargers or persons cleans up and removes a discharge of a hazardous substance, those dischargers and persons shall have a
file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

right of contribution against all other dischargers and persons in any way responsible for a discharged hazardous substance or other persons who are liable for the cost of the cleanup and removal of that discharge of a hazardous substance.

[N.J.S.A. 58:10-23.11f(a)(2)(a) (emphasis added).]

The plain meaning of the statutory language is that one must first cleanup and remove the discharge in order to recover for discharge of a hazardous substance. See, e.g., Bonnieview Homeowners Ass'n, supra, 655 F. Supp. 2d at 504 (granting summary judgment on ERA claim where "the Plaintiffs have not incurred any cleanup or removal costs related to the contamination"). As such, we conclude that plaintiffs may have had standing but had no private cause of action under the Spill Act because they did not cleanup and remove the discharge. Here, plaintiffs have expended no funds to remediate the property. The only funds expended have been to pay an expert to identify the site of the 1988 spill. They have yet to demonstrate that they even know the extent of the spill much less the nature of the work to remediate the site and its cost. Thus, they do not qualify for contribution from the Shanna Lynn defendants or for compensation from DEP or the Spill Compensation Fund. Requiring plaintiffs to have undertaken remediation of the property does not render the ERA superfluous. It simply provides standing to parties to seek relief as warranted or permitted by other statutes, rules and regulations. It provides no substantive rights. Superior Air Prods., supra, 216 N.J. Super. at 58. We, therefore, affirm the 2002 order granting partial summary judgment dismissing the ERA and Spill Act claims against the Shanna Lynn defendants and Lerco. III Following trial in March 2006, the trial judge dismissed all breach of contract and fraud claims, except for the equitable fraud claim. The judge found that plaintiffs established a prima facie case of equitable fraud, permitted further legal arguments concerning the remedy due to the lapse of time, the absence of a definitive investigation to delineate the scope of the damage, and efforts to remediate the property, and reserved decision. The judge rendered his decision on the remaining equitable fraud claim on October 15, 2010. He held that the classic equitable remedies of rescission and reformation of the sales agreement were not available in this case due to the passage of time. The judge also cited plaintiffs' decision to proceed

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

with reconstruction of the damaged building in 1997 without remediation of the condition resulting from the 1988 spill and dismissal of the Spill Act and ERA claims because "plaintiff[s] had not complied with the statutory obligations . . . ." The trial judge proceeded to dismiss the equitable fraud claim because of the absence of an appropriate remedy. The trial judge's ruling that plaintiffs had adduced sufficient evidence to require denial of the Shanna Lynn defendants' motion for judgment at the close of plaintiffs' case is well-founded. Indeed, many of the facts are undisputed. On March 11, 1988, plaintiffs entered an agreement to purchase the Rainbow Inn in Clayton, Gloucester County. The agreement encompassed the real estate and the business the Shanna Lynn defendants operated on the property. Plaintiffs had the opportunity to perform an environmental investigation of the property before the purchase but elected not to do so. On August 10, 1988, Lerco delivered 524 gallons of fuel oil to the Rainbow Inn. The delivery filled the 550 gallon underground storage tank on the property. In preparation for the August 29, 1988 closing, the Shanna Lynn defendants directed Lerco to "top off" the tank on August 29, 1988. While the parties were at the closing, Lerco pumped another 530 gallons of fuel oil into the tank. Defendant Virgil Maderich was at the Rainbow Inn at the time of the closing and the fuel oil delivery. Plaintiffs and defendants Louis Garman and Theresa Maderich returned to the Rainbow Inn after the closing. Theresa found the receipt. Although Theresa believed the receipt must be wrong, she said nothing. The following day, Carl Kirstein, the president of Lerco, called Theresa to inform her that the "volume was too big, too large a volume in that short a period of time," and inquired if she suspected theft of the oil. Theresa replied that she did not think so and Kirstein informed her that there must be a leak. He suggested that he pump out the tank and install two tanks in the basement of the Rainbow Inn. The next day, Lerco pumped 238 gallons of fuel oil from the tank. The Shanna Lynn defendants then installed at their expense two 275 gallon tanks in the basement of the Rainbow Inn and abandoned the failed tank. In a deposition, Kirstein testified he memorialized this conversation in a letter dated August 31, 1988; Theresa denied receipt of the letter. Neither Theresa nor Garman or any other individual associated with Shanna Lynn informed Kirstein that the Rainbow Inn had been sold to plaintiffs. Plaintiffs were aware of the change of tanks because they were on-site at the time. The purchase agreement provided that plaintiffs and defendants would work side-by-side during the week following the sale. Plaintiffs did not inquire about the reasons for the work because they were so busy with the transition.
file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

In January 1995, there was a fire at the Rainbow Inn. Reconstruction did not commence until mid-1997. During excavation for the footings of the new building, the backhoe operator discovered a quantity of black sludge that smelled like oil. Plaintiff Lawrence Dalton instructed the operator to proceed with his work when the operator informed him that the material would not interfere with the construction. "Depending on the remedy sought, an action for fraud may be either legal or equitable in nature." Jewish Ctr. of Sussex Cnty. v. Whale, 86 N.J. 619, 624 (1981). A misrepresentation amounting to actual legal fraud consists of a material representation of a presently existing or past fact, made with knowledge of its falsity and with the intention that the other party rely thereon, resulting in reliance by that party to his detriment. The elements of scienter, that is, knowledge of the falsity and an intention to obtain an undue advantage therefrom, are not essential if plaintiff seeks to prove that a misrepresentation constituted only equitable fraud.

[Id. at 624-25 (citations omitted).] Rescission is a proper remedy for equitable fraud. Id. at 626-27. "The object of equitable remedies such as reformation and rescission is to restore the parties to the status quo ante and prevent the party who is responsible for the misrepresentation from gaining a benefit." Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 612 (1989). "Remedies available to courts of equity 'are broad and adaptable.'" In re Estate of Hope, 390 N.J. Super. 533, 541 (App. Div.) (quoting In re Mossavi, 334 N.J. Super. 112, 121 (Ch. Div. 2000)), certif. denied, 191 N.J. 316 (2007). Other remedies include a constructive trust, an accounting, and an injunction. A constructive trust is an appropriate remedy to redress a "wrongful act" that results in "unjust enrichment." Thompson v. City of Atlantic City, 190 N.J. 359, 371 (2007). "[I]t will be imposed when a person has acquired possession of or title to property under circumstances which, in good conscience, will not allow the property's retention." Thompson v. City of Atlantic City, 386 N.J. Super. 359, 375-76 (App. Div. 2006), aff'd as modified, Thompson, supra, 190 N.J. at 386. The remedy would convert the recipient into a trustee and require that he account for the property in whatever manner the court deems fair and just. Ibid. Accounting is an equitable remedy normally used in situations involving commercial properties whereby a

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

possessing tenant accounts to a non-possessing co-tenant for any rents the tenant received for use of the property. Newman v. Chase, 70 N.J. 254, 266-67 (1976). The remedy can also be used in the context of "wrongful acts." In Wear-Ever Aluminum, Inc. v. Townecraft Industries, Inc., 75 N.J. Super. 135, 150-51 (Ch. Div. 1962), the defendant was ordered to account to the plaintiff for its deliberate pirating of the plaintiff's employees. The defendant was required to pay the plaintiff for the training costs of the pirated employees as well as replacement employees. Ibid. A court may decline to impose an equitable remedy if such relief is neither realistic nor fair. For example, in Bonnco Petrol, the Court held that reformation was not an appropriate remedy because the remedy would reward the wrong-doer. 115 N.J. at 612. In Hilton Hotels Corp. v. Piper Co., 214 N.J. Super. 328, 336-37 (Ch. Div. 1986), Judge Gibson held neither specific performance nor rescission appropriate remedies to enforce a six-year-old right of first refusal agreement between the purchaser of property and the former owner. In doing so, the judge noted the lapse of eleven weeks between receipt by the prior owner of notice of an imminent sale of the property to a third party and any effort to exercise rights under the agreement, and substantial performance of the original agreement. Id. at 335-36. Here, rescission was neither realistic nor fair. Transfer of ownership of the real property and the business known as the Rainbow Inn occurred in 1988. Eighteen years had elapsed between the closing and conclusion of trial. There had been substantial performance of the agreement of sale. Moreover, when plaintiffs elected in 1997 to proceed with construction rather than to investigate the extent of the spill, they took action that rendered remediation of the site more difficult and perhaps more extensive and expensive. Neither party could be restored to the positions they occupied in 1988. A constructive trust is of no benefit to plaintiffs. A constructive trust would simply affirm title to property they already own. Similarly, an accounting has no use in this context. The trial judge could have issued a mandatory injunction requiring the Shanna Lynn defendants to conduct an investigation of the contamination, to undertake remediation of the site, or to contribute a share of the costs to remediate the site. It does not appear from this record that he gave such injunctive relief any consideration. Although we hold that plaintiffs have no bases as yet to recover under the Spill Act, we note that injunctive relief is one of the remedies available under this statute to obtain remediation of contaminated sites, N.J.S.A. 58:10-23.11u, and the nature of the equitable fraud in this case suggests such

file:///C|/Users/Peter/Desktop/Opinions/a0048-10.opn.html[4/20/2013 11:57:05 AM]

a0048-10.opn.html

relief may be a suitable remedy to plaintiffs. Delays of cleanup efforts in contamination cases are particularly costly due to the potential damages suffered by the environment. New Jersey courts have recognized that "the determination of responsibility between or among successive owners possibly liable for the contamination may impede the swift implementation of cleanup efforts . . . ." Superior Air, supra, 216 N.J. Super. at 61-62. In light of this concern, courts have imposed remedies to ameliorate the damage caused by environmental hazards as liability litigation drags along: Injunctions are generally used in pollution-related actions brought on the theory of nuisance, although in proper circumstances they may be issued in actions brought for negligence and trespass, and if there is no other adequate remedy, an injunction is available to abate continuous and permanent pollution that causes irreparable injury, or to prevent a multiplicity of suits.

[61C Am. Jur. 2d Pollution Control
Download a0048-10.opn.pdf

New Jersey Law

New Jersey State Laws
New Jersey Tax
New Jersey Labor Laws
New Jersey Agencies
    > New Jersey DMV

Comments

Tips