320 ASSOCIATES, LLC VS. NEW JERSEY NATURAL GAS CO. (L-1180-16, OCEAN COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1831-16T2
320 ASSOCIATES, LLC,
Plaintiff-Appellant,
v.
NEW JERSEY NATURAL GAS CO.,
Defendant-Respondent.
__________________________
Argued June 5, 2018 – Decided June 29, 2018
Before Judges Reisner, Mayer, and Mitterhoff.
On appeal from Superior Court of New Jersey,
Law Division, Ocean County, Docket No. L-1180-
16.
Marguerite Kneisser argued the cause for
appellant (Carluccio, Leone, Dimon, Doyle &
Sacks, LLC, attorneys; Stephan R. Leone, of
counsel; Marguerite Kneisser, on the briefs).
Lisa S. Bonsall argued the cause for
respondent (McCarter & English, LLP,
attorneys; Lisa S. Bonsall, of counsel and on
the brief; J. Forrest Jones and Stephanie A.
Pisko, on the brief).
PER CURIAM
Plaintiff, 320 Associates, LLC, appeals from a December 5,
2016 order, granting summary judgment in favor of defendant New
Jersey Natural Gas (NJNG) and dismissing plaintiff's complaint on
statute-of-limitations grounds.1 We affirm in part and remand in
part.
I
Plaintiff owns a piece of commercial property located just
to the north of NJNG's property. On May 2, 2016, plaintiff filed
a six-count complaint asserting that NJNG's property was polluted
with coal tar, discharged as the result of industrial operations
on NJNG's land decades earlier. Plaintiff asserted that the coal
tar pollution on NJNG's property resulted in the migration of coal
tar plumes (migration) onto plaintiff's land.
Plaintiff asserted that it first learned of the migration in
2008. Plaintiff alleged that it had its land tested in 2007,
after cleaning up pollution from leaking underground storage tanks
(USTs) on its own property and putting down clean soil. In 2007,
plaintiff's property was found to be clean. However, when the
property was tested again in 2008, more pollution was found, but
this new pollution was attributable to migrating coal tar plumes
1
Defendant filed a motion to dismiss, which the court converted
to a summary judgment motion, because the parties submitted
materials outside the pleadings. See R. 4:6-2(e).
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from NJNG's land. Plaintiff has not tested its property since
2008.
Plaintiff claimed that, as a result of the newly discovered
pollution, it could not sell its property to a current commercial
tenant. Plaintiff asserted that the tenant had leased the land
from 2006 through 2016, with an agreement to buy, but the agreement
required plaintiff to obtain an unconditional "no further action"
letter from the Department of Environmental Protection (DEP).2
Plaintiff claimed that it could not obtain such a letter due to
NJNG's failure to abate the pollution. As a result, the tenant
terminated the purchase agreement on April 4, 2014. To mitigate
damages, plaintiff extended the tenant's lease through 2023.
Plaintiff asserted that the pollution from NJNG's land had
decreased the value of plaintiff's land and might negatively affect
plaintiff's future ability to either sell or lease the property.
The complaint further asserted that in 2011, NJNG obtained a
remedial action workplan from Haley & Aldrich, Inc., which called
for a clean-up of NJNG's property and plaintiff's property.
Plaintiff asserted that in 2012, NJNG had "indicated" that "based
on the estimated amount of time to complete the initial remediation
2
Plaintiff's brief states that the DEP no longer issues "no
further action" letters, but instead a property owner may obtain
a Response Action Outcome (RAO).
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work," it planned to start the remediation project on plaintiff's
property in spring 2015. However, the 2016 complaint alleged that
NJNG had not yet undertaken any remedial actions on plaintiff's
property. The complaint did not directly address whether NJNG had
already cleaned up its own property, but it could be read as
implying that NJNG had not done so.
Based on those essential facts, which were repeated
throughout the complaint, plaintiff asserted claims for
negligence, per se negligence, strict liability, violation of the
Spill Act, violation of the New Jersey Environmental Rights Act,3
nuisance, and trespass. In each count of the complaint, plaintiff
sought the same relief, including damages for the lost sale or
rental value of its property, and injunctive relief requiring NJNG
to clean up the pollution on NJNG's property and on plaintiff's
property.
NJNG filed a motion to dismiss, supported by authenticated
copies of documents referenced in plaintiff's complaint, and two
letters from plaintiff's attorney. See R. 4:18-2. Those documents
included a 2003 remedial investigation workplan prepared by
3
On this appeal, plaintiff did not brief its Environmental Rights
Act claims and the related Spill Act claims, and those statutory
claims are, therefore, waived. Plaintiff did not separately brief
its trespass claims, treating them as essentially the same as its
nuisance claims. We will not separately address the trespass
claims.
4 A-1831-16T2
Environmental Evaluation Group, in connection with an
investigation of pollution from the USTs on plaintiff's property.
The report referenced the possible migration of pollution from
NJNG's property onto plaintiff's property. A February 28, 2006
proposal from Brinkerhoff Environmental Services, Inc. to
plaintiff, addressing removal of the USTs, also stated that "a co-
mingled groundwater contaminant plume and contaminated soil" on
plaintiff's property was "impacted" by both former industrial
operations on NJNG's property and the leaking USTs on plaintiff's
property.
NJNG also submitted with its motion a copy of the lease and
lease extension between plaintiff and plaintiff's tenant. The
lease, dated July 28, 2006, contemplated a sale if plaintiff could
obtain an unconditional no further action letter from the DEP. On
April 4, 2014, plaintiff entered into a lease extension with the
tenant, acknowledging the presence on the property of coal tar
residue from NJNG's property. The lease also recited that NJNG
had prepared a remedial workplan "that is in the process of being
approved by the [DEP]." The tenant agreed to allow NJNG to perform
remediation work on the leased property.
In its opposition, plaintiff relied on some additional
documents, including an August 3, 2011 environmental assessment
of plaintiff's property. This report noted that the March 2008
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testing showed an increase in groundwater contamination, but
attributed the increase to "recontamination of the area from the
[NJNG property] coal tar plume" rather than leakage from the USTs.
An additional report, dated April 7, 2011, prepared for NJNG and
submitted to DEP, detailed the history of the pollution on NJNG's
property and neighboring land and NJNG's plans for remediation.
The plan included a proposal to clean up plaintiff's property,
reciting that "A Deed Notice will be established for [plaintiff's
land] incorporating the institutional and engineering controls
necessary for commercial and industrial use of this property,
subject to property owner consent."
Plaintiff's submission also included a 2015 proposal from an
environmental engineering firm. The firm proposed further
sampling of plaintiff's property and development of a plan to work
with NJNG to complete the clean-up and obtain a RAO from DEP.
Plaintiff's submission also included an August 19, 2014 letter
from plaintiff's attorney to NJNG's senior environmental engineer.
The letter insisted on retaining plaintiff's right to pursue
damages for loss of value to its property, as a condition of
allowing NJNG to enter on plaintiff's land for remediation
purposes. A second letter sent in 2015 recited similar concerns,
and enclosed an appraisal report opining that plaintiff had
suffered losses of about $2.5 million. Thus, it appears that the
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remediation process may have stalled due to a dispute over
plaintiff's monetary demands.
II
Our review of the trial court's decision is de novo, using
the same standard employed by the trial court. See Townsend v.
Pierre, 221 N.J. 36, 59 (2015) (summary judgment); State ex rel.
Campagna v. Post Integrations, Inc., 451 N.J. Super. 276, 279
(App. Div. 2017) (motion to dismiss). On a summary judgment
motion, the facts must be viewed in the light most favorable to
the non-moving party. Townsend, 221 N.J. at 59; Brill v. Guardian
Life Ins. Co., 142 N.J. 520, 540 (1995). Likewise, in reviewing
a motion to dismiss filed under Rule 4:6-2(e), "we assume that the
allegations in the pleadings are true and afford the pleader all
reasonable inferences." Sparroween, LLC v. Township of West
Caldwell, 452 N.J. Super. 329, 339 (App. Div. 2017) (citation
omitted).
In this case, the parties agree that the applicable statute
of limitations (SOL) is the six-year SOL for tortious injury to
real property. N.J.S.A. 2A:14-1. Ordinarily, a cause of action
will accrue when "the right to institute and maintain a suit first
arose." Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 395 (2016)
(citation omitted). Under the discovery rule, however, "a cause
of action will be held not to accrue until the injured party
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discovers, or by an exercise of reasonable diligence and
intelligence should have discovered that he may have a basis for
an actionable claim." Belmont Condo. Ass'n, Inc. v. Geibel, 432
N.J. Super. 52, 83 (App. Div. 2013) (quoting Lopez v. Swyer, 62
N.J. 267, 272 (1973)).
Based on the facts as recited above, we agree with the trial
court that plaintiff's claim for permanent diminution in the value
of its property, however characterized in the complaint, was
untimely. Plaintiff's claim is based on a permanent loss in the
value of its land, due to the migration of coal tar contaminants
from NJNG's property. Arguably, plaintiff first learned about
this problem in 2003 or in 2006. However, viewing the evidence
in the light most favorable to plaintiff, at the latest it learned
about the condition in 2008. Thus, the six-year statute of
limitations for a damages claim based on permanent diminution in
the value of the property began to run in 2008 and expired in
2014. See P.T. & L. Const. Co., Inc. v. Madigan & Hyland, Inc.,
245 N.J. Super. 201, 209 (App. Div. 1991) ("[O]nce a party knows
that it has been injured and that the injury is the fault of
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another, it has the requisite knowledge for the applicable period
of limitations to commence running.").4
We likewise reject plaintiff's negligence argument, which it
asserts by analogy with the Spill Act, that migration constitutes
a new "discharge" of pollutants every time it occurs. Contrary
to plaintiff's argument, the discharge of pollutants on NJNG's
property occurred decades ago. The migration of those pollutants
onto plaintiff's land does not constitute a new discharge. See
White Oak Funding Inc. v. Winning, 341 N.J. Super. 294, 299-300
(App. Div. 2001); see also N.J. Dep't of Env. Prot. v. Dimant, 418
N.J. Super. 530, 544 (App. Div. 2011), aff'd, 212 N.J. 153 (2012).
The trial court correctly dismissed plaintiff's negligence claim.
We reach a different conclusion with respect to plaintiff's
nuisance claim, insofar as plaintiff requests a court order
requiring NJNG to complete the clean-up of its own property and
plaintiff's property. Viewed favorably to plaintiff, there
appears no dispute that NJNG can implement a clean-up. The record
suggests that NJNG may be unwilling to do so unless plaintiff
waives any claim for money damages; that dispute may be driving
this lawsuit.
4
Plaintiff's equitable estoppel claim is without sufficient merit
to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
9 A-1831-16T2
As the Supreme Court held in Russo Farms v. Vineland Board
of Education, if a nuisance can be abated, the failure to abate
constitutes a continuing tort that entitles a plaintiff to relief.
144 N.J. 84, 103-04 (1996). If a nuisance cannot be abated, there
is no continuing tort, and the statute of limitations begins to
run when the defendant creates the harmful condition. Id. at 103.
Arguably, under the discovery rule, the SOL might be tolled until
a plaintiff discovers the harmful condition. However, once it is
discovered, the SOL begins to run. See Lopez, 62 N.J. at 272.
In this case, to the extent plaintiff claims that its land
can never be remediated to the point where it can obtain a RAO,
thus permanently diminishing the land's value, or that the
pollution of NJNG's property is a permanent condition that
diminishes the value of plaintiff's land, those claims are barred
by the SOL. See Russo, 144 N.J. at 103. Plaintiff knew about the
ongoing pollution in 2008 and could have learned about the
diminution in the value of its land had it chosen to investigate
the issue then.
However, to the extent plaintiff claims that its property can
be remediated, and that NJNG can remediate its own property, it
has the right to pursue its demand that defendant proceed with the
remediation. See Interfaith Cmty. Org. v. Honeywell Int'l, Inc.,
263 F. Supp. 2d 796, 857 (D.N.J. 2003). Plaintiff may also be
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entitled to damages, if any accrued within the six-year SOL, due
to unreasonable delay in abating the nuisance. However, it would
be premature to decide now if plaintiff is in fact entitled to
damages, or any other relief, because the parties have not
completed discovery and the record is inadequate.
For example, plaintiff's complaint asserts that NJNG's
remediation plan called for NJNG to start cleaning up plaintiff's
property in 2015. Plaintiff's complaint does not assert that was
an unreasonable schedule. Yet, according to plaintiff, its tenant
canceled the purchase agreement in 2014.
Also missing from this record is any legally competent
evidence of DEP's actual approval of any plan, any particular
time-frame for remediation, or any particular required level of
remediation. Nor is there evidence of how that remediation level
will affect the legally permitted uses of the property.5 That
information may be relevant to whether NJNG has acted reasonably
or unreasonably. It may also be relevant to whether plaintiff can
enforce a remedy if that remedy is inconsistent with actions that
5
Because NJNG filed its application as a motion to dismiss in
lieu of an answer, the parties had not taken discovery, other than
preliminary discovery of documents referenced in the complaint,
under Rule 4:18-2. The parties also did not present certifications
of corporate employees or officers having personal knowledge of
facts. Nor did either side present expert reports elucidating the
parties' dueling environmental theories.
11 A-1831-16T2
DEP has permitted or required. Those issues, however, are not
ripe for our consideration and we do not address them. See Lyons
v. Township of Wayne, 185 N.J. 426, 434-35 (2005) (finding summary
judgment on a continuing nuisance claim was "inappropriate" due
to the unsatisfactory record).
In summary, viewing the complaint and the limited documentary
record in the light most favorable to plaintiff, we conclude that
the trial court acted prematurely in dismissing plaintiff's
nuisance claims. We remand for the purpose of reinstating those
claims and proceeding with discovery.
Affirmed in part, remanded in part. We do not retain
jurisdiction.
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