ALAN E. MEYER VS. MICHAEL CONSTANTINOU (L-5712-08, MONMOUTH COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-1793-18
ALAN E. MEYER, Receiver
for CLARKE BROTHERS, INC.,
and CLARKE BROTHERS, INC.,
a New Jersey Corporation,
Plaintiffs-Appellants,
v.
MICHAEL CONSTANTINOU,
JAMES CONSTANTINOU, SJ
PRODIGY, INC., HAN J. LIM
d/b/a ATLANTIC CLEANERS,
SILVER HANGER OF
MANASQUAN, INC., JOHN
O'CONNOR d/b/a ATLANTIC
CLEANERS, and MANASQUAN
PLAZA, INC.,
Defendants-Respondents.
Argued February 1, 2021 – Decided April 16, 2021
Before Judges Currier, Gooden Brown and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Monmouth County, Docket No. L-5712-08.
Marguerite Kneisser argued the cause for appellants
(Carluccio, Leone, Dimon, Doyle & Sacks, LLC,
attorneys; Robert L. Gutman, of counsel and on the
briefs; Marguerite Kneisser, on the briefs).
Mary Lou Delahanty argued the cause for respondents
Silver Hanger of Manasquan and John O'Connor
(Delahanty & McGrory, LLC, attorneys; Mary Lou
Delahanty, on the joint brief).
Paul H. Schneider argued the cause for respondents
Michael Constantinou, James Constantinou, and
Manasquan Plaza, Inc. (Giordano, Halleran & Ciesla,
PC, attorneys; Paul H. Schneider and David J. Miller,
on the joint brief).
PER CURIAM
This appeal arises from a dispute over the source of environmental
contamination caused by the discharge of tetrachloroethylene (also known as
perchloroethylene or PCE) onto property owned by plaintiff Clarke Brothers,
Inc. (CBI). CBI operated a gasoline station and an automobile repair facility on
the property and discovered the PCE contamination while remediating
chemicals that had leaked from its underground storage tanks.
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I.
In 2008, CBI and its receiver, Alan E. Meyer (collectively, plaintiffs),
filed a complaint against the owners of an adjacent three-unit shopping center 1
and the owners and operators of the dry-cleaning business that leased one of the
units.2 The complaint alleged that the dry-cleaning operations caused the
discharge of PCE, which migrated downhill onto the CBI property, and that the
PCE contamination prevented plaintiffs from selling their property and
decreased its market value. Plaintiffs sought relief under the New Jersey
Environmental Rights Act (ERA), N.J.S.A. 2A:35A-1 to -14, the New Jersey
Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24,
and various common law causes of action.3
1
Defendants Michael and James Constantinou purchased the shopping center
property in 1993 and constructed a new building in 1995. The following year
the Constantinous began leasing a portion of the shopping center property to a
dry-cleaning business – Atlantic Cleaners.
2
Atlantic Cleaners was purchased by defendant Silver Hanger of Manasquan,
Inc. in 1996. Silver Hanger was owned by defendant John O'Connor and Robert
Kowalski. In 2007, Silver Hanger sold its assets to defendant Han Lim and S.J.
Prodigy. The business continued to operate as Atlantic Cleaners throughout this
litigation.
3
In 2010, the Constantinous transferred title to the shopping center property to
defendant Manasquan Plaza, Inc. Each brother owned fifty percent of the shares
of Manasquan Plaza.
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A.
In November 2011, Silver Hanger and O'Connor filed a motion to refer
plaintiffs' action to the New Jersey Department of Environment Protection
(DEP) pursuant to N.J.S.A. 2A:35A-8, "the statutory provision of the ERA that
directs a court to remit parties to administrative proceedings that are 'required
or available to determine the legality of the defendant's conduct.'" Meyer v.
Constantinou, No. A-4163-11 (App. Div. Nov. 15, 2013) (slip op. at 8).
On March 12, 2012, the trial court signed an order dismissing the
complaint without prejudice and referring the environmental claims to DEP
which was "actively enforcing the environmental laws" with regard to the CBI
and Constantinou properties.
CBI appealed from the March 2012 order. We affirmed, holding that
plaintiffs had the ability "to cooperate with DEP in determining the extent of the
contamination and the scope of the cleanup" and that after accomplishing those
objectives, they could move to reinstate the complaint. Id. at 16.
During the pendency of the appeal, the court entered a final judgment of
foreclosure against the CBI property. A sheriff's sale took place in January 2019
and the deed was transferred to the buyer on March 13, 2019.
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After this court affirmed the order of referral to DEP, the Supreme Court
released its decision in Magic Petroleum Corp. v. Exxon Mobil Corp., 218 N.J.
390, 409-10 (2014), which held that under the Spill Act, property owners could
file contribution claims in New Jersey Superior Court and the court could
allocate liability before final resolution of a site remediation plan.
Therefore, on August 6, 2014, plaintiffs filed a motion for the trial court
to reconsider its decision to refer the matter to DEP. The motion was granted
and the matter returned to the trial court.
B.
Silver Hanger and O'Connor filed a motion for summary judgment
seeking, among other things, to dismiss the ERA claim on the basis that
plaintiffs failed to establish a continuous or intermittent violation. In their reply
papers, these defendants asserted that plaintiffs' expert opinion was net opinion
and should be barred. The court denied the motion and found the issue of net
opinion had not been properly raised. A subsequent motion for reconsideration
was also denied. Plaintiffs and Lim reached a settlement agreement in May 2016
and the claims against those defendants were dismissed.
Plaintiffs were permitted to proceed on their claim for consequential
damages as they produced two contracts for the sale of the property which they
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alleged they were unable to consummate because of their financial condition and
inability to undertake the necessary remediation to sell the property.
II.
The case proceeded to a bench trial before Judge Jamie S. Perri over
seventeen days between October 30, 2017 to December 14, 2017. On the first
day of trial, defendants Silver Hanger and O'Connor requested a N.J.R.E. 104
hearing for the court to determine whether plaintiffs' expert – Christopher
Neuffer – had sufficient qualifications to support his testimony. Counsel also
argued that Neuffer's expert report was net opinion.
Because the case was proceeding as a bench trial, Judge Perri declined to
conduct a Rule 104 hearing. She reasoned that because there was no jury, she
could hear the expert's testimony and subsequently determine the net opinion
issue.
After plaintiffs completed their presentation of evidence, defendants
moved for dismissal of all claims under Rule 4:37-2(b). The court granted the
motion only for dismissal of the claims asserted against O'Connor for personal
liability.
On October 29, 2018, the court issued a comprehensive written opinion
finding plaintiffs had not proven their claims and entering judgment in favor of
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defendants. Judge Perri determined that plaintiffs' expert, Neuffer, had provided
only a net opinion which could not support their claims. She stated further that,
even if she had considered his opinion, Neuffer's testimony was not sufficiently
credible to support a finding of proximate cause. The court also found plaintiffs
could not pursue a cause of action under the ERA under the presented
circumstances. The court memorialized its decision in a November 13, 2018
order.
III.
On appeal, plaintiffs contend the trial court erred in: (1) finding Neuffer
offered an inadmissible net opinion; (2) dismissing their claims under the ERA;
and (3) dismissing the liability claims against O'Connor personally.
To provide context for our decision, we provide the following facts
elicited at trial.
CBI Property
Brothers Peter and John Clarke formed CBI in 1976 and, shortly
thereafter, CBI purchased an existing gas station and automotive repair shop.
They operated the business as a Gulf Service station. A one-story, four-bay
cement block building was located in the central portion of the CBI property.
Storage sheds and trailers were located along the property's northeastern border
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adjacent to the shopping center owned by the Constantinous. The diesel fuel
dispenser was located on the southeast corner of the property, and the gasoline
pump island was located on the east side of the building.
The property also contained five underground storage tanks (USTs),
including three gasoline tanks, one diesel tank, and one waste oil tank. The
gasoline and diesel tanks were located on the south side of the service building;
two tanks held 8000 gallons of gasoline, one tank held 6000 gallons of gasoline,
and one tank held 3000 gallons of diesel fuel. Gulf Oil replaced the gasoline
tanks in the late 1980s or early 1990s.
On the north side of the building, an underground tank held 250-275
gallons of waste oil. This tank was present when the Clarke brothers purchased
the property and was not replaced. Peter testified that he and his brother did not
use that tank in their business.4 Instead, they used above-ground waste oil tanks.
Peter said he and his brother never used PCE in the business . To clean
tools, they used a spray can of cleaner "that anybody can buy." They would
spray the brakes "to keep the dust down" and blow them dry. He did not know
4
Plaintiffs took Peter's de bene esse deposition in 2009. He died prior to the
trial. The videotaped deposition was played in court.
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the name of the spray can products or their chemical composition. He stated
that no other maintenance work required the use of the spray cans.
In 2000, CBI closed the gas station due to the cost of equipment upgrades.
It retained Meridian Environmental Services (Meridian) to remove the four
gasoline tanks and the piping connecting the tanks to the pumps. Peter testified
that they retained an environmental company because they had "very generous
offers" to buy the property, but "no one would buy it until everything was
removed."
During his deposition, Peter acknowledged having "difficulty
remembering." He did not recall the name of the company retained by CBI or
the date it removed the tanks. He also did not recall any assessment by DEP of
penalties against CBI, a letter from the municipality warning against his
intention to spread contaminated soil over his property, or the date when the
contaminated soil was removed.
In August 2000, Meridian removed the pump island, three gasoline USTs,
and the diesel fuel UST; the inspection of each tank did not reveal any holes.
In removing the waste oil tank, located adjacent to the dry-cleaning
business, Meridian found "pea-sized holes" at one end of the tank. Therefore,
the company collected a soil sample from that area of the tank. An analysis of
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the sample detected total petroleum hydrocarbons (TPH), including heating and
diesel oil. Based on the presence of TPH, the sample was further analyzed for
volatile organics that were associated with waste oils or petroleum products.
The scan detected xylene slightly in excess of DEP standards.
Meridian lined the waste oil tank excavation with plastic before filling it
with clean soils and called the DEP hotline to report a discharge of hazardous
substances. Because the waste oil tank was located between CBI's service
building and the Constantinous' adjacent property, no further excavations in this
area were done. Meridian backfilled the excavations around the USTs and
removed a truckload or approximately twenty-five tons of suspected
contaminated soil. It stockpiled a small amount of contaminated soil on site.
In September 2004, during a site visit by the municipality's Director of
Code Enforcement, Peter stated he intended to spread the stockpiled soil over
the property. In a letter dated October 5, 2004, the director "strongly suggested"
that Peter refrain from disturbing "the pile of soil" without getting permission
from the State. Nevertheless, CBI used the stockpiled soil to grade off the
surface of the former tank excavation area after the soil had settled.
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As stated, the brothers had decided to sell the property. CBI was in
financial trouble. Peter testified there were substantial tax liens on the business
and property for some time, even prior to John's death in December 2005.
CBI executed a contract of sale with a developer to buy the property for
$600,000 in March 2005. The contract was contingent in part on CBI obtaining
a no further action (NFA) letter from DEP, indicating the property was clear of
any contaminants.
When the potential buyer retained an engineering company to perform a
survey of the property, the company detected two areas of chemical
contamination on the north side of the property between the service building and
adjacent shopping center, and one area of oil contamination in the northwest
corner. Although the buyer was willing to go forward with the sale, CBI was
unable to obtain an NFA letter. The buyer cancelled the contract in August
2007.
Peter's former wife testified during the trial that she recalled interest in
the property but she was unsure if there were other offers. She and Peter testified
that the cancellation of the executed contract and the inability to find a different
buyer due to the PCE contamination had a financial impact on the business and
on their personal finances. When Peter closed the auto repair shop in December
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2006, his wife said there were federal and state tax liens on the property in
addition to "many outstanding debts, not only to the IRS but to the -- vendors
and to the [municipality], property taxes."
In December 2006, the court appointed Meyer as fiscal agent to "marshal"
CBI's books and records, and to pay expenses. In June 2007, at the request of
John's widow, the court appointed Meyer as receiver for CBI to manage the sale
of its property and determine its liabilities. At the time, CBI had no liquid assets
or available funds.
In March 2008, a second entity offered to purchase the CBI property for
$700,000 "with numerous contingencies." The buyer intended to build
condominiums on the property. He stated that groundwater contamination was
a "deal breaker" for him because it would significantly impact the property's
value.
During the course of negotiating the contract and the contingencies, Peter
and the potential buyer learned from Neuffer that his investigation confirmed
that PCE had contaminated the groundwater. The buyer terminated the contract.
Meyer made no further effort to sell, rent, or lease the property after the two
potential buyers withdrew their purchase offers. Because of the accrual of taxes
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and penalties, the property ultimately went into foreclosure and was sold during
the pendency of the litigation.
Plaintiffs' claim against defendants was for the consequential damages
they alleged were incurred as they were unable to consummate two contracts for
the sale of their property because of their financial condition and inability to
undertake the necessary remediation to sell the property.
Atlantic Cleaners
The shopping center owned and constructed by the Constantinous was
located about twenty to twenty-five feet from the CBI service building. There
was a fence along the northern border between the properties. Neuffer stated
that beyond the rear door of the dry-cleaning business was a concrete sidewalk,
then a two-foot area of soil up to the fence separating the Constantinou property
from the Clarke property. The fence was on the northern property boundary of
CBI adjacent to the soil excavation conducted for the former waste oil tank. The
distance from the rear door to the Clarke Brothers property was approximately
six feet.
As stated, O'Connor and his partner, Kowalski, purchased the shares of
Silver Hanger and took over a lease in the shopping center from the owner of a
dry-cleaning corporation. They also purchased the dry-cleaning equipment from
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the prior owner. In June 1997 they opened Atlantic Cleaners. The partners hired
O'Connor's wife and son and Kowalski's wife to assist in the daily operations of
the company.
O'Connor had no prior experience operating a dry-cleaning facility.
Before purchasing the business, he and Kowalski spent five days observing the
operation of another dry cleaners. After the purchase, O'Connor's son and
Kowalski's wife attended two or three weeks of training on the operation of dry -
cleaning machinery. During the first two months of its operation, the prior
owner provided two people to work at the dry cleaners and assist with the
transition to make sure the operation was "running as planned."
At first, O'Connor's son and Kowalski's wife were the only people who
operated the dry-cleaning machine. However, after retiring from his principal
job in 1998, O'Connor attended a three-week training course on the operation of
dry-cleaning machinery conducted by the National Cleaners Association (NCA).
Until 2000, O'Connor worked mostly on weekends. He operated the dry-
cleaning machine alone or assisted his son. Kowalski's wife left the business in
2000 and for the next year O'Connor worked there three to four days a week. In
2001, he left to join a family-owned business, but returned to Atlantic Cleaners
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in 2002 and worked there "three days on, three days off, a week on or a week
off."
Atlantic Cleaners used a Multimatic dry-cleaning machine which
contained a closed-vent system with carbon absorbers to remove vapors from
the system. Atlantic also purchased a containment tank from the manufacturer
of the dry-cleaning machine. The ten-inch-high steel tank went under the
machine and surrounded it on all sides, with two feet extending behind the motor
pumps and button traps, and one foot in front, so any leaks of PCE would fall
into it. The dry-cleaning machine was used three times a day for five days a
week. Only O'Connor and his son, and Kowalski and his wife could operate the
machine and remove and dispose of its waste.
At the time of his purchase of the business, O'Connor was aware that the
dry-cleaning machine used a chlorinated solvent, PCE. During the ten years that
O'Connor owned and operated the business, Atlantic Cleaners used PCE.
O'Connor described PCE as a carcinogen. He was aware of OSHA regulations
and requirements regarding its handling and storage.
O'Connor testified that the PCE used in the dry-cleaning machine
discharged vapors. In 1999, Atlantic Cleaners purchased a halogen device to
measure the volume of PCE in the air. By 2000 the employees were using the
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halogen device every day. O'Connor said "there were times when we would
detect a vapor leak, which would require a gasket to be changed. And that was
the benefit of it."5 He usually operated the dry-cleaning machine in the morning
to shield his employees and customers from exposure to the PCE vapor .
O'Connor said that a vendor placed the PCE in the machine. Deliveries
were made through the rear door of the business and the vendor would place a
drum containing PCE into the "button trap," which would "move the chemical
into the machine." The solvent was used in lieu of water and detergent to remove
dirt and stains on clothes.
The PCE and its waste by-products were removed daily from the machine.
A spout with an open valve would drain the "wastewater" into a three -to-five-
gallon plastic bucket that hung from the back of the machine. After the machine
was shut down and the lint, waste bucket, and strainers were cleaned, the
operator would carry the uncovered bucket over the waste containment tank and
then pour the wastewater into an unlocked plastic receptacle, lock the receptacle,
and put the bucket back on the machine for use the next day. O'Connor estimated
they collected a quart of wastewater a day. He stated there was no floor drain
near the machine.
5
Gaskets held the filters in place.
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The Atlantic Cleaners employees also changed the spent filters that
removed impurities from the solvent, and they removed sludge and lint from the
machine. The filters, sludge, and lint collections contained traces of PCE. There
were separate receptacles for wastewater, sludge, and lint which had lids and
were kept a few feet behind the back of the machine, approximately twenty-five
feet from the rear door of the business.
Atlantic Cleaners used a licensed disposal company to remove the
wastewater, sludge, and lint receptacles and replace them with new containers.
On average, the company removed the wastewater container about once a month.
If the bucket was close to full, O'Connor or another employee would ask the
disposal company to remove it. He said the disposal company would place the
locked receptacle on a dolly and remove it through the rear door. The lint and
sludge receptacles were removed every two to three months.
The dry-cleaning machine was serviced as needed by specialized
individuals recommended by the manufacturer. O'Connor, his son, Kowalski,
and his wife also performed service and maintenance on the machine. On every
day of use, the operator felt around the machine for residue and visually looked
under it "to see if anything was dripping." The operator also conducted daily
inspections of the "pipe connections, fittings, couplings and valves," in areas
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where PCE came through, as well as the pumps, filter gaskets, solvent tanks and
containers, and the water separator. As stated, the operator also performed daily
inspections using the halogen detector to determine whether there were any PCE
leaks.
O'Connor testified that his employees used "checklists from day one" to
show the business complied with inspections and the handling of any PCE leaks.
The business kept daily records and weekly condenser temperature and leak
inspection logs recommended by DEP.
According to O'Connor, PCE was ordered "as needed," with deliveries
occurring every three to four months. Each delivery consisted of approximately
19.2 gallons of PCE solution with approximately sixty-seven gallons delivered
annually.
O'Connor never witnessed or heard anyone report a spill of wastewater on
the premises or a discharge to the environment. He specifically denied ever
having a spill in the area outside the dry cleaner's back door.
O'Connor was aware of self-contained leaks in the steel tank of the dry-
cleaning machine. He stated:
And I think I mentioned yesterday that we found many
times with our hands that there would be a residue and
you would change the gasket. We did have a leak or
two, few leaks that we had over the course of the years.
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It's a machine. That's why we put the container tank
there.
O'Connor was aware of approximately five to ten gasket leaks of PCE
during his ownership and operation of Atlantic Cleaners. He performed two of
the repairs himself. In one instance, he notified DEP, but it was not a "reportable
incident" because the leak was contained in the tank and "did not hit the
environment." He also recalled a leak of PCE into the motor pump, which he
fixed by tightening a fitting. On the other occasions, Kowalski fixed the leaks
by replacing gaskets.
O'Connor explained that any leaks from the machine went into the steel
containment tank, where rags would soak up the chemical. The operator then
wrung out the rags in the button trap, placed them back into the machine and ran
the cycle again. O'Connor said he learned this procedure during his training at
the NCA. He further explained: "There's no drips into the containment tank, it
means that it was just moisture starting to come, it was indicating that the gasket
was starting to corrode and needed to be inspected." He also advised that
government authorities inspected the dry-cleaning operations during his years
of ownership, and the business was never cited for noncompliance with any laws
or regulations. O'Connor testified he did not learn of any PCE contamination of
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either the CBI property or the Constantinou property until after the sale of the
dry-cleaning business.
In May 2007, Silver Hanger sold the business to Prodigy, which was
owned equally at the time by Lim and his mother. The sale included the dry-
cleaning machine.
Before buying the business, Lim received training for two weeks from
Kowalski. Lim used PCE in the same dry-cleaning machine until July 2012,
when he bought a new machine that used a non-hazardous cleaning substance.
He replaced the machine because it was "old and wearing down." He denied
any leaks of PCE while the old machine was in place. He was still operating
Atlantic Cleaners at the time of trial.
Michael Constantinou also testified at trial. He stated he was unaware of
any spill of PCE within or outside of the dry-cleaning premises while Silver
Hanger owned the operation. He did recall Lim telling him of an incident in
2012 when PCE leaked from the machine onto the floor inside the dry-cleaning
store. He also described a second incident in 2012 when the disposal company
that removed the waste spilled some of it onto the sidewalk behind the dry
cleaners. The Constantinous reported that spill to DEP, which investigated and
tested the wastewater and had no concerns. According to Michael, DEP stated
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there was no indication of any PCE in the spilled wastewater. Both of these
events occurred after Atlantic Cleaners was sold to Lim and after the lawsuit
was filed.
Counsel also questioned O'Connor about the grade level of the
Constantinou property as compared to the CBI property. He said that from 1997
to May 2007 the Constantinou property was lower than the CBI property . He
described that after rain storms the water flowed from the CBI property into the
rear door of the dry cleaners.
Michael Constantinou also recalled that "for the longest period of time"
the CBI property was higher than the Constantinou property. However, after the
Clarkes excavated some of the soil on their property, Michael stated the
Constantinou property had a higher elevation by one or two inches.
Remediation of the CBI Property
In February 2005, DEP conducted a compliance evaluation and found
violations related to the August 2000 removal of the USTs on the CBI property.
It ordered CBI to submit a site investigation report detailing the prior removal
of the storage tanks and a remedial investigation report.
The following year, CBI retained Neuffer and his company, Envirotactics,
Inc. – a consulting company that performed environmental investigation and
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remediation work. In March 2006, Envirotactics prepared a remedial
investigation report regarding the removal of the five USTs by Meridian. As
previously noted, Meridian had found surficial contamination, meaning it was
limited to the upper two feet of soil, and attributed it to a spilling or overfilling
of the tanks. Relying on Meridian's findings, Envirotactics determined that no
additional investigation or remediation was required with the exception of the
waste oil tank. It proposed additional soil excavation, disposal, and post-
excavation soil sampling in the waste oil tank area, along with disposal of soils
"impacted by the gasoline tank overfill release."
In following through with its proposal, Envirotactics conducted its first
excavation in the area of the former waste oil tank to remove contaminated soils,
and also performed post-excavation sampling. Envirotactics also re-excavated
and removed approximately one foot of the contaminated soil which had been
spread over the area of the former gasoline and diesel fuel oil tanks and
stockpiled it with the soil removed from the area of the waste oil tank.
The company also collected eight soil samples along CBI's property line
with Manasquan Plaza. The purpose of the samples was to document that all the
contaminated soil had been removed and that the vertical excavation was
complete. One of the eight samples, taken at the western end of the excavation
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(the farthest distance from the Constantinou property), detected the highest level
of TPH and was sent to a laboratory to analyze for volatile organics. PCE was
detected at a reported level of 120 ppm, which was above the DEP's most
stringent cleanup criteria.
Thereafter, Envirotactics conducted additional soil excavation along the
northern end of the property adjacent to the fence along the property boundary
and collected post-excavation samples. Testing of the samples revealed PCE.
The company also removed approximately twenty tons of soil, which it
stockpiled separately.
In late March 2006, Envirotactics collected three additional soil samples
to determine whether the PCE contamination was due to an off-site discharge.
Two samples were collected about one foot from the fence; one sample was
collected on CBI's property directly opposite the rear door of the dry cleaners
and the other was collected approximately twenty feet to the east towards the
area of the former waste oil tank. All three samples detected PCE, with the two
samples near the property line indicating higher concentrations.
On May 2, 2006, Envirotactics submitted a remedial action report
addressing the February and March 2006 investigations. Although
acknowledging soil sampling in the area of the waste oil tank detected PCE,
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Neuffer stated "reportedly, chlorinated solvents were not utilized by Clarke
Brothers." He noted that "additional soil sampling was performed along the
property boundary in the general area of the former waste oil tank and in an area
away from the waste oil tank. PCE contaminated soil was identified in higher
concentrations than those previously detected in the area of the waste oil tank."
Neuffer also reported that soils collected at the property line ten feet
directly across from the rear door of the dry cleaners had "a distinct dry cleaning
solvent (PCE) odor." He stated that "the surface drainage from the adjacent
property containing the dry cleaning operation is towards the Clarke Brothers
property." Therefore, he concluded, "it is apparent that the [PCE] has migrated
onto the [CBI] site from the adjacent property that is operated as a dry cleaner."
Neuffer requested DEP issue an NFA letter regarding the PCE on the CBI
property.
DEP responded by requesting Envirotactics conduct more sampling to
establish that the PCE contamination on the CBI property was not associated
with the former USTs. In July 2006, Neuffer and Peter entered into a
memorandum of agreement (MOA) with DEP, stating that an off-site source
existed for the contamination detected on the CBI property and outlining certain
environmental work to be performed.
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In October 2006, Neuffer submitted a remedial investigation report to
DEP for the PCE detected on the CBI property not associated with the USTs.
The report addressed the excavations relating to the removal of the waste oil
tank, and the test results of various samples. It noted that higher concentrations
of PCE were detected along the northern boundary, that the soils near the dry
cleaners had a distinct PCE smell, that CBI did not use chlorinated solvents in
its auto repair services, and that the dry cleaners recently installed a new system .
Envirotactics concluded: "Since soil sample results confirm that the PCE
contamination has migrated onto the Clarke Brothers property from an offsite
source, no further investigation or remediation is proposed. Clarke Brothers is
not responsible for contamination originating from an offsite source."
The same month, DEP issued an Administrative Order and Notice of Civil
Administrative Penalty Assessment to plaintiffs of $26,000 for violations,
including the failure to submit a site investigation report, to determine the
classification of wastes, and to submit a remedial investigation report. DEP also
cited CBI for failure to remove the contaminated soil. In February 2008, DEP
and Meyer on behalf of CBI entered into a settlement agreement that addressed
the violations and enforcement actions and imposed a reduced penalty of
$13,000.
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In the interim, in March 2007, Envirotactics submitted a remedial
investigation report to obtain an NFA letter for the tank-removal investigation
and remediation. The company conducted groundwater and soil investigations
and concluded that no further investigation of groundwater was necessary and
that the only outstanding issue was the disposal of the stockpiled soil . On July
6, 2007, Envirotactics reported to DEP that the stockpiled soil was properly
disposed of and requested an NFA letter with a covenant not to sue for the USTs
removals.
In June 2007, Neuffer collected three samples near the rear door of the dry
cleaners. These samples detected PCE, with the highest level being next to the
concrete sidewalk at the rear of the dry-cleaning operation. The concentrations
exceeded DEP's most stringent cleanup criteria. Neuffer stated these levels far
surpassed the highest concentration of PCE in any sample taken from the CBI
property.
In its remediation investigation report addendum dated August 2007,
Envirotactics wrote that the additional soil sampling on the Constantinou
property identified higher levels of PCE than previously detected at the property
boundary. Therefore, Neuffer concluded again that the contamination on the
CBI site came from Atlantic Cleaners. He supported his conclusion with the
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same reasons he had previously presented in his May 2006 report: (1) CBI did
not use chlorinated solvents; (2) PCE was a common chemical used in the dry-
cleaning industry; (3) the rear door of the dry cleaners opened to a sidewalk that
ran along the northern property boundary directly adjacent to the soil
excavations for the former waste oil tank; (4) surface drainage ran from the
adjacent property containing the dry cleaners towards the CBI property; (5) PCE
contamination was surficial and present at the greatest levels on the adjacent
property; (6) PCE concentrations increased with the distance away from the
former waste oil tank; (7) samples collected on the adjacent property had high
levels of PCE and "a distinct dry cleaning solvent odor"; and (8) the dry cleaners
had reportedly replaced its dry-cleaning machine.
On October 5, 2007, DEP issued an NFA letter and covenant not to sue,
informing Peter that no further action was necessary for the remediation of
contamination caused by the USTs. However, the NFA did not encompass the
PCE contamination found on the CBI property.
The letter stated that the PCE found on the CBI property "is from an
unknown source unrelated to the [waste oil tank area of concern]." "In order to
identify any areas of concern that may be contributing to the noted
contamination, or alternatively, confirm that the source of this PCE
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contamination is from off-site, a Preliminary Assessment pursuant to N.J.A.C.
7:26E-3, is necessary."
In July 2008, Envirotactics collected eight soil samples and three
groundwater samples on the CBI property to determine the effect of PCE on the
groundwater. Neuffer testified that the additional work was done because a
purchaser was interested in the property.
In a letter to Peter dated August 4, 2008, Envirotactics reported that the
PCE contamination was the result of a discharge from the adjacent Constantinou
property, and that the groundwater was significantly impacted. Due to the high
levels of contamination on the adjacent property and the depth of groundwater
contamination on the CBI property, Envirotactics concluded that "it d[id] not
appear feasible to remediate the subject property without also remediating the
contaminated soil located offsite to the north." This letter was the last
involvement Envirotactics had with the CBI property.
In January 2009, DEP's Bureau of Underground Storage Tanks (Bureau)
sent a notice of deficiency letter to Peter, identifying the failure to remediate a
discharge and to submit a preliminary assessment report in the required format .
In February 2012, the Bureau notified CBI of its failure to comply with
the MOA and to evaluate and remediate the PCE on its property. The letter
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noted that counsel for the Clarke Brothers had informed DEP that CBI did not
intend to address the previously reported violations. It advised CBI that "based
upon the investigation conducted to date, contaminants which are not normally
related to the material stored in the UST(s) have been detected in the soil and
groundwater on-site." The Bureau also informed CBI that it had to conduct a
remedial investigation of groundwater unless it could demonstrate that the
contamination came from an off-site source with no on-site contribution to show
CBI was exempt from liability under the Spill Act.
The Constantinou Property and Remediation
In light of the information received from Neuffer regarding the
Constantinou property, DEP sent a notice of deficiency to Lim and Michael
Constantinou in January 2009 advising they had failed to remediate the PCE
discharge. The letter stated that PCE was "a chemical not related to petroleum
products sold or used at the Gulf Service Station, but was commonly used by
dry cleaners." DEP required a vapor intrusion investigation to collect vapor
samples from the soil and air to determine if levels of contamination were above
the DEP cleanup guidelines. It also required a work plan that included proposals
for sub-slab and indoor air sampling, and directed Atlantic Cleaners to enter into
an MOA to address the contamination.
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In March 2009, the Constantinous retained Practical Environmental
Solutions, LLC to conduct a vapor intrusion investigation at the shopping center .
A vapor intrusion system, approved by DEP, was eventually installed in the dry
cleaners building.
The Constantinous also retained Stantec, an engineering and consulting
company, which performed additional sampling to delineate the extent of the
soil contamination and to characterize the groundwater on and off-site. A soil
sampling taken in front of the CBI service building detected a low concentration
of PCE. Sampling also identified elevated levels of PCE in the soil and
groundwater in the location of the dry cleaners. Stantec opined that a discharge
of PCE at Atlantic Cleaners caused the contamination near its building.
The Constantinous subsequently hired another environmental company to
remediate the soil of PCE contamination both on their own property and on the
CBI site.
Neuffer's Expert Testimony at Trial
Neuffer earned a Bachelor of Arts degree in industrial engineering and a
Master's degree in environmental science. He worked for DEP in its
Environmental Cleanup and Responsibility Act department and then for a
private consulting company where he performed site investigations and
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remediation. In 1995, he started his own company – Envirotactics. He was
certified by DEP for subsurface investigations and closures of USTs, registered
by the National Registry of Environmental Professionals as an environmental
property assessor, and certified by the Institute of Hazardous Materials
Management as a hazardous materials manager. In 2010, Neuffer became a
DEP-licensed site remediation professional (LSRP), which allowed him to "sign
off and close environmental cases."6
Neuffer was qualified by the court as an expert in the field of
environmental sciences, including "the assessment and investigation of not only
the source of location of the contaminant but all of the geological and hydro
geological aspects of migration."
Neuffer testified that PCE was "a chlorinated volatile organic" that had a
"specific gravity that's heavier than water and it's a typical chemical that's used
in dry cleaning applications." He characterized PCE as a known hazardous
substance and a carcinogen that required disposal by a licensed facility or
reclamation recycling.
6
Neuffer testified that the LSRP program replaced DEP's NFA letter for site
remediation cases.
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Neuffer explained the first excavation conducted in February 2006 was in
the area of the waste oil tank because when that tank was removed, there were
holes in the tanks. He needed to take soil samples to assure DEP that the
contaminated soil was completely removed. Neuffer testified he did not expect
to find PCE in the soil because it had not been found in the area of the waste oil
tank, and because Peter had denied using PCE "in his parts cleaning" or "as a
parts degreaser or anything." A second deeper excavation continued to reveal
PCE contamination.
Neuffer told the court that he suspected the PCE contamination was
coming from "off site." He therefore took soil samples from under the fence
situated along the CBI/Manasquan Plaza property boundary. The samples
detected PCE, with the highest level of contamination coming from a sample
taken from under the fence outside the rear door of the dry-cleaning operation.
Neuffer opined that a surface discharge at the adjacent dry cleaners was
the source of the PCE contamination on the CBI property. He gave the following
reasons: Peter denied using a chlorinated solvent on his property, whereas the
dry cleaners used PCE; the soil samples collected near the dry cleaners smelled
like solvents used for dry-cleaning; the concentrations of PCE were highest in
soil samples taken outside the rear of the dry cleaners and decreased in all
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directions from there; the topography sloped downward from the dry cleaners
towards the CBI property; and the highest level of groundwater contaminants
were detected directly behind Atlantic Cleaners.
Neuffer also noted that PCE was detected underneath the dry-cleaning
facility, but not under the CBI service building, that PCE was the only
contaminant detected in the area away from the waste oil tank, and that the dry
cleaners had recently replaced their machinery. He further noted that the
consultants who performed excavations on the Constantinou property concluded
that there was a discharge of PCE from the dry cleaners.
Neuffer did not believe the PCE leaked from holes in the waste oil tank.
He explained that PCE was usually detected in soil samples taken close to the
surface, whereas the holes in the tank were below the surface. He also stated
that PCE contamination would not travel from a greater depth to the surface, and
that no PCE was detected in the area of the tank holes. He conceded he did not
know the history of the waste oil tank or observe its piping, which could
sometimes leak.
As stated, Neuffer relied on Peter's testimony that CBI did not use solvents
to wash auto parts. He admitted he did not know the scope of vehicle repairs
performed by CBI or whether CBI performed brake work, and he did not
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investigate prior operations on the property. Neuffer stated he knew that
solvents were used in auto repair work and that such products could contain PCE
and conceded that CBI might have used small quantities of chlorinated solvents
for cleaning parts or brakes. Nevertheless, even if CBI used small amounts of
spray can solvents, Neuffer said he would not change his conclusion as to the
source of the contamination.
Neuffer testified that he visually observed the properties and said:
it was plain to see that the sidewalk was definitely
higher than the level that was on the . . . other side of
the fence. So it dropped off . . . [n]ot substantially, but
then it was a gradual gradient away from this property
toward the Clarke Brothers.
In Neuffer's opinion, the PCE migrated downgradient with rainwater from
the Constantinou property onto the CBI property, and entered the ground
vertically and horizontally. He said this explained why the soil sample with the
highest level of PCE contamination was not found outside the dry-cleaning store
but was found on CBI property.
Neuffer did not know exactly how the discharge or spill occurred but said
it could happen a "wide variety of ways." For example, based on his prior
experience with PCE, spent solvents from a dry-cleaning operation sometimes
were stored outside the rear door and could spill. "There could be waste water
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34
from mopping floors where there was a spill and you could discharge that out
the back." Likewise, "if you had filters from the dry cleaning machine or
something if they were stored outside and rain water got on them, it could cause
PCE to come out of the filters."
Although Neuffer never saw filters outside the rear of the dry cleaners, he
said there were a "wide variety of potential ways that PCE could have been
discharged to the surface." He noted that the samples taken by Stantec detected
no PCE in the soils below CBI's service building, but found PCE in the soil
samples taken below the slab floor of the dry cleaners, with the highest
concentration at the rear of the cleaning facility. Moreover, he relied on Peter,
who told him the dry cleaners had replaced its machinery.
On cross-examination, Neuffer acknowledged that he did not measure the
exact topography of the properties and did not know the gradient of the CBI
property before 2006. Nor did he ask any of the property owners for information
about the topography. He also did not know what CBI used the sheds and trailer
for or whether prior owners used the waste oil tank.
Neuffer explained that CBI did not ask him to prepare a preliminary
assessment report or a phase I investigation, which would have provided
information regarding the historical use of the properties. If he had done so, he
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35
would have looked at the site history back to 1932 or when it was "naturally
vegetated." However, he stated that he did not need to look at any other sources
of information because his investigation focused on determining whether the
dry-cleaning operation was the source of the contamination.
Neuffer acknowledged he had no personal information about a discharge
of PCE from Atlantic Cleaners. He assumed the discharge occurred after the
building was constructed because the spill was surficial. He did not see a
discharge occur and neither Peter nor anyone else reported a discharge to him .
He also never visited the dry cleaners, other than as a customer. He never saw
where the cleaners kept the dry-cleaning equipment and did not ask O'Connor
to see the record of PCE usage. In fact, he never had a conversation with
O'Connor when he was conducting his investigation.
Neuffer further acknowledged that auto repair facilities commonly used
solvents. However, he never investigated whether the activities on the CBI
property caused or contributed to the PCE contamination on its property.
Neuffer advised that at some point after "all the reports" were prepared,
he became aware that CBI used spray cans containing chlorinated solvents. He
did not know when or how CBI used the products or the amount they used. He
admitted making no determination regarding CBI's use of the spray cans. He
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36
acknowledged that the use of spray cans of chlorinated solvents constituted the
use of solvents, but explained that he did not think it was a potential source for
the contamination.
When shown a receipt from an auto parts store that reflected CBI's
purchase of a solvent, Neuffer did not recall seeing it before. He stated he did
not inform DEP that the references in his reports about the non-use of
chlorinated solvents were inaccurate, explaining the use of these spray cans did
not affect the conclusions in the reports that he submitted or the "tank work ."
Neuffer was questioned about specific soil samples. He testified that the
sample taken from the waste oil tank excavation site, about ten feet from the end
of the CBI service building, which detected PCE, was subject to dilution at the
laboratory by a factor of 500% during testing. He did not know why the lab
diluted the sample and could not say if or how the dilution affected the
quantitative result. He did not place this sample on his isopleth map. Neuffer
acknowledged that if the results without dilution had shown a higher
concentration of PCE, they would have contradicted his opinion. Specifically,
he acknowledged that if the soil sample had a much higher concentration of PCE
than depicted in his reports, then "yeah, this isopleth would be totally different ."
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IV.
In a comprehensive written opinion dated October 29, 2018, Judge Perri
reviewed the factual findings and assessed the credibility of the witnesses.
Judge Perri noted that Peter was the primary source of information
regarding the Clarke's operation of its business and the use of its property. She
stated that when his videotape deposition was conducted in December 2009,
Peter was suffering from stage four renal cancer and had undergone extensive
radiation and chemotherapy treatments. She described him as "very weak and
frail. It was the court's impression that Peter's physical condition contributed to
his inability to give credible, reliable testimony." The court found Peter could
not recall the sequence of important events and did not seem to have the energy
to give thought to the questions being asked. Therefore, she "put little credence
in the accuracy of Peter's recollection or testimony, particularly with regard to
critical liability issues."
Judge Perri also found that Neuffer was not a credible witness, explaining
that he could not provide details on critical issues, he avoided responding
directly to questions, he appeared "noticeably uncomfortable," he gave
inconsistent testimony about Meridian's initial soil samples, he accepted Peter's
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38
bare statement that CBI did not use solvents, and he did not satisfactorily answer
questions on cross-examination.
The judge noted that "out of an abundance of caution" she qualified
Neuffer "by virtue of his training and experience to offer opinions on matters of
site investigation, remediation and determination of the source of
contamination." However, after listening to Neuffer's testimony, despite his
qualifications, Judge Perri found "Neuffer offered no real technical or scientific
testimony at trial regarding the properties of PCE or how it interacts with the
environment." She noted that his reports and his testimony did not address the
specific properties of the chemical. The court also found that Neuffer did not
offer testimony or modeling to explain, "on a chemical or physical level, how
PCE would travel through rainwater over the ground or how its pro perties 'can
affect travel and impact.'" In addition, the judge stated Neuffer did not discuss
the effect of rainwater or the elements on PCE after it was introduced into the
environment, "or correlate any such changes in the concentrations of PCE
detected on both properties."
The judge stated that Neuffer:
relied on such 'unscientific' bases for his opinion as his
visual observation of a 'gradual downward slope' from
the [Manasquan Plaza] property to the CB[I] property,
which he opined permitted PCE to be transported by
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39
rainwater to the CB[I] property. Even in this regard, he
did not offer any data or measurements to support his
opinion. He did not obtain a survey or perform any tests
that would identify the actual slope of the property nor
did he offer any evidence that the slope was sufficient
to permit rainwater to travel to the other locations on
the CB[I] property where PCE was detected. He did
not explain how the topography or ground cover would
impact on the manner and direction in which water
would flow from the one property to the other which
might explain the random nature of the deposits.
Judge Perri found these deficiencies and omissions affected "the weight and
credibility that can be afforded to Neuffer's opinions." She elaborated that
"Neuffer's willingness to accept Peter's bare statement that CB[I] did not use
solvents in its auto repair business and his failure to perform any investigation
of the historical use of the CB[I] property, casts serious doubt on the validity of
his expert opinion."
The judge noted that the CBI property was used as a gas station before
CBI purchased it, that CBI did not perform any environmental investigations
prior to its purchase, and that it continued to operate a gas station and auto repair
service on the property for thirty years before PCE was detected. Furthermore,
[d]espite Neuffer's knowledge of CB[I]'s casual attitude
toward environmental contamination, as evidenced by
the decision to simply spread the stockpiled
contaminated soil on the property rather than disposing
of it properly, Neuffer accepted at face value Peter's
representation that CB[I] did not use solvents in its auto
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40
repair business and relied on that fact in forming his
opinion.
In addition, when Neuffer was confronted on cross-examination with the sales
receipt establishing CBI's purchase of aerosol cans of solvents, she stated he
"became hesitant and evasive." She also found Neuffer's credibility was
diminished when he was unsure when or how he found out CBI did use spray
solvents and in his concession that he did not advise DEP of the information.
Judge Perri further found that Neuffer's credibility was undermined by his
"equivocal attempts" to explain why he did not perform a preliminary
assessment of the property. She stated he appeared "noticeably uncomfortable
when questioned about the failure to perform a [preliminary assessment]" and
that he testified unconvincingly that he did not recall whether "he told Peter
about the obligation to perform a [preliminary assessment]," despite repeated
demands to do so by DEP. The court noted that if Neuffer had prepared a
preliminary assessment and researched the historical use of the CBI property
and other potential sources of PCE, it would have enabled him and DEP "to
eliminate CB[I] as a potential source of the PCE contamination." The judge
concluded that Neuffer or Peter "made an informed decision not to perform a
[preliminary assessment], which might disclose CB[I]'s own responsibility for
the contamination."
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Moreover, the court found inconsistencies in Neuffer's testimony
regarding the soil samples collected by Meridian in 2000. She noted that
Neuffer testified that Meridian scanned one of the samples for PCE and none
was found, which contradicted the March 2006 report in which he wrote that
this sample was only analyzed for TPH.
Additionally, the court found Neuffer's explanation for the exclusion from
his isopleth map and exhibits of the first soil sample taken from the CBI property
that detected PCE, "less than credible." The judge noted Neuffer did not discuss
"any anomalies" regarding the sample until cross-examination, when he
acknowledged that the sample had a dilution factor of 500%. The court also
noted, that in his report, Neuffer wrote that the sample had a PCE level of 120
ppm, without mentioning the undiluted reading. Notably, the court found that
"[i]f in fact the undiluted reading had been included on the isopleth map, it
would have substantially skewed the map 'results' and demolished Neuffer's
theory."
Judge Perri determined that Neuffer based his opinion on three facts that
were not supported by credible evidence. First, he assumed the PCE
contamination came from the adjacent property because CBI did not use
solvents, which was disproven. Second, he assumed the dry cleaners had
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purchased a new dry-cleaning machine around the time the PCE contamination
was discovered on the CBI property and relied on this assumption to prove the
discharge came from the dry cleaners. But there was no evidence of a change
in equipment at Atlantic Cleaners at that time. Third, he assumed a spill
occurred at the dry cleaners and that the PCE was carried by rainwater onto the
CBI property, with no scientific support or attempt to identify the degree of
slope that led to the movement of the substance.
Therefore, the judge concluded that Neuffer offered a net opinion that
could not support plaintiffs' claims. She stated further that, "[e]ven assuming
that the opinion [was] not barred as a net opinion, the court would find that
Neuffer's testimony on many key issues, as set forth above, was not sufficiently
credible to support a finding that plaintiff had proven causation by a
preponderance of the credible evidence."7 The court dismissed plaintiffs' claims
and entered judgment in favor of defendants.
V.
On appeal, plaintiffs argue that the court erred in finding Neuffer's
testimony was inadmissible net opinion; dismissing its claims against O'Connor;
and in dismissing its ERA claims. We are not persuaded.
7
The court also considered and rejected plaintiffs' ERA claim.
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A.
In considering Neuffer's testimony and opinions, we turn to N.J.R.E. 703
as the foundational rule for expert testimony. Townsend v. Pierre, 221 N.J. 36,
53 (2015). This rule requires experts to support their opinions with "facts or
data derived from (1) the expert's personal observations, or (2) evidence
admitted at the trial, or (3) data relied upon by the expert which is not necessarily
admissible in evidence but which is the type of data normally relied upon by
experts." Ibid. (quoting Polzo v. Cnty. of Essex, 196 N.J. 569, 583 (2008)).
A corollary to N.J.R.E. 703 is the net opinion rule, which "forbids the
admission into evidence of an expert's conclusions that are not supported by
factual evidence or other data." Id. at 53-54. It requires an expert to "'give the
why and wherefore' that supports the opinion, 'rather than a mere conclusion.'"
Id. at 54 (quoting Borough of Saddle River v. 66 E. Allendale, LLC, 216 N.J.
115, 144 (2013)). An expert's opinion is inadmissible if it is "'based merely on
unfounded speculation or unquantified possibilities.'" Id. at 55 (quoting
Grzanka v. Pfeifer, 301 N.J. Super. 563, 580 (App. Div. 1997)). An expert also
renders an inadmissible net opinion if the expert fails "to explain a causal
connection between the act or incident complained of and the injury or damage
allegedly resulting therefrom." Koruba v. Am. Honda Motor Co., 396 N.J.
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Super. 517, 526 (App. Div. 2007); see Townsend, 221 N.J. at 57-58 (holding
expert's testimony was net opinion to extent he speculated on causation by
failing to apply his engineering expertise to present empirical evidence and by
reconstituting facts). Experts must "be able to identify the factual bases for their
conclusions, explain their methodology, and demonstrate that both the factual
bases and the methodology are reliable." Townsend, 221 N.J. at 55 (quoting
Landrigan v. Celotex Corp., 127 N.J. 404, 417 (1992)). Thus, "a trial court must
ensure that an expert is not permitted to express speculative opinions or personal
views that are unfounded in the record." Ibid.; see Koruba, 396 N.J. Super. at
526 (experts must "be able to point to a generally accepted, objective standard
of practice and 'not merely to standards personal to the witness'") (quoting
Fernandez v. Baruch, 52 N.J. 127, 131 (1968)).
The net opinion rule, however, does not require an expert to support or
organize an opinion in a manner preferred by opposing counsel. Townsend, 221
N.J. at 54. Moreover, a court should not exclude an expert's testimony merely
because it does not account for a particular fact or condition that opposing
counsel considers relevant. Ibid. An expert who fails to give weight to a factor
deemed important by an adverse party does not render an inadmissible net
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45
opinion if the expert offers sufficient reasons that logically support the opinion.
Ibid. Such an omission is a proper subject for cross-examination. Id. at 54-55.
The admission or exclusion of evidence lies in the sound discretion of the
trial court. Id. at 52. We apply a "deferential approach to a trial court's decision
to admit expert testimony, reviewing it against an abuse of discretion standard."
Id. at 53 (quoting Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344,
371-72 (2011)).
We also defer to a trial judge's credibility determinations. Cesare v.
Cesare, 154 N.J. 394, 412 (1998); Reese v. Weis, 430 N.J. Super. 552, 567 (App.
Div. 2013). "Such deference is appropriate because the trial judge has 'a feel of
the case' and is in the best position to 'make first-hand credibility judgments
about the witnesses who appear on the stand.'" Reese, 430 N.J. Super. at 567-
68 (quoting N.J. Div. of Youth & Fam. Servs. v. E.P., 196 N.J. 88, 194 (2008)).
Plaintiffs presented Neuffer as their liability expert. His ultimate
conclusion was that the source of PCE contamination on the CBI property was
the dry-cleaning operation at the adjacent shopping center. Our review of his
extensive testimony reflects this opinion was not supported by the facts or any
explained reliable methodology. Instead, Neuffer's testimony on the cause of
the PCE contamination was speculative and based on his personal opinions.
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46
As Judge Perri found, Neuffer did not provide any objective data to
support his theory that rainwater carried PCE downhill from the dry cleaners to
the CBI property. He acknowledged that he did not know how or when a
discharge or spill occurred at the dry-cleaning facility, and he could not confirm
that CBI did not use chlorinated solvents in its auto repair work.
Neuffer relied on three unfounded "facts" to support his causation opinion.
First, he assumed the PCE contamination came from the adjacent dry cleaners
because CBI did not use chlorinated solvents in the operation of its business.
However, he did not investigate the history of the CBI property, did not know
the contents of the waste oil tank during the years of use by the former owners,
and did not confirm Peter's statement that CBI did not use PCE. He testified
that CBI never asked him to prepare a preliminary assessment but said such an
investigation was not necessary because his work focused on determining
whether the dry cleaners was the source of contamination. Despite the letter
from DEP requiring the assessment, Neuffer claimed there was no indication in
any documents that such an assessment was necessary. And he did not believe
that a preliminary assessment would have changed his opinion.
Moreover, Neuffer did not investigate Peter's claim that he and his brother
never used PCE in their auto repair business, even though he conceded at trial
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47
that auto repair facilities used chlorinated solvents and that after "all the reports
were prepared," he became aware that CBI used spray cans that contained these
solvents. Although Neuffer did not know when or how CBI used chlorinated
solvents, or the amount or number of spray cans used over the years, he did not
"think that having a spray can that may contain PCE would be a potential source
for the contamination we identified." He never told DEP about the use of
chlorinated solvents on the CBI property, although he knew the references in his
reports about the non-use of chlorinated solvents was inaccurate. Thus,
Neuffer's assumption that CBI did not use PCE on its property was not supported
by the factual evidence.
Second, Neuffer assumed Atlantic Cleaners obtained a new dry-cleaning
machine around the time of the discovery of the PCE contamination on the CBI
property. He apparently believed this change in equipment was due to a
discharge of PCE. He relied on the replacement of the machine as one of the
eight reasons supporting his opinion that the chlorinated solvent contamination
was due to the adjacent dry-cleaning operation, and included this "fact" in his
May 2006 remediation report, and in its August 2006 remediation investigat ion
report addendum.
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Neuffer, however, never visited the dry cleaners, other than as a customer,
and never inspected the dry-cleaning equipment or saw the rear of the shop
where the owners kept it. He also never spoke to O'Connor or anyone else at
the time who worked at the dry cleaners, and never asked to see the records
maintained by O'Connor for the dry-cleaning operations. Most importantly, Lim
testified that he replaced the dry-cleaning machine in July 2012 – many years
after the PCE was first detected on the CBI property. Moreover, Lim stated he
replaced the dry-cleaning machine with one that used a non-hazardous cleaning
substance and that he supplanted the machine because it was "old and wearing
down." There was no evidence in the record that he replaced it because of a
discharge of PCE at his dry-cleaning facility. Thus, Neuffer's testimony about
the reason for the replacement of the dry-cleaning machine was speculative and
unsubstantiated by any facts in the record.
Third, Neuffer assumed there was a discharge of PCE on the property of
the dry cleaners and that the PCE was carried by rainwater onto the CBI
property. He stated he followed the contamination gradient from the off-site
source, found no indication of another source within that gradient, and observed
that contamination levels continually decreased as they moved towards the CBI
property.
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Judge Perri found Neuffer provided no "scientific support for this
hypothesis," that he failed to identify "the degree of the 'gradual slope' between
the properties that would have permitted the transfer to occur," and that he did
not explain how the migration of PCE led to "the levels plotted on the isopleth
map." We cannot disagree.
Neuffer primarily relied on test results from soil samples taken on the two
properties. He explained that a sample taken near the rear door of the dry
cleaners indicated the presence of PCE at a level of 12,138 ppm, whereas the
highest concentration of PCE on the CBI property "[r]ight under the fence line"
was 393 ppm. When questioned, he acknowledged that a sample taken closest
to the dry cleaners' rear door showed a PCE level of 850 ppm, saying "the
numbers don't decrease exactly from the rear of the door."
Neuffer believed the isopleth map he created supported his opinion by
showing that the PCE concentration increased closer to the dry cleaners,
explaining its gradients matched the land's topography. However, he did not
include the sample taken from the excavation of the waste oil tank and located
only several feet from the CBI service building which detected PCE in excess
of 12,000 ppm. He acknowledged that if he had included that sample on the
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map, the "isopleth would be totally different." As the trial court described, this
testimony was "the most devastating attack on Neuffer's credibility."
Neuffer's opinion on the downward gradient from the dry cleaners to the
CBI property was based on his visual observation of the two properties in 2006.
He explained: "[J]ust visually observing the property, it was plain to see that the
sidewalk was definitely higher than the level that was . . . on the other side of
the fence." He did not investigate whether there were any changes in the
gradient over time.
Neuffer relied on the gradient to explain the PCE found on the CBI
property. However, both O'Connor and Michael Constantinou testified that for
a long period of time the Constantinou property had a lower topography than its
neighbor. O'Connor recalled that from 1997 through May 2007, water would
flow after rainstorms from the CBI property to the rear door of his cleaners.
Michael recalled that the topography changed after the Clarke brothers
excavated some of the soil on their property, which left the Constantinou
property higher by about two inches. There is no evidence that Neuffer
consulted topographic maps, soil surveys, or groundwater site maps in reaching
his conclusion about the gradient or spread of the PCE contamination. Nor did
he consider the contrary testimony of other witnesses.
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In Neuffer's opinion, the PCE "spread out with rainwater" even where the
gradient was "close to level." He testified that PCE was denser than water and
tended to migrate vertically and then horizontally at greater depths, but he also
claimed that the contamination on the CBI soil traveled horizontally from
surface runoff. However, as stated by the trial court, Neuffer did not explain
how PCE would travel through rainwater over the ground, address how its
properties could affect "travel and impact," or discuss "the effect that rainwater
or the elements would have on PCE" after its introduction into the environment .
He therefore did not support his opinion with any scientific data or explanation.
The record also supports the trial court's determination that Neuffer was
not a credible witness on key issues such as the source of the PCE contamination
and how and why it migrated to the CBI property. For example, he could not
explain why the specific soil sample with unfavorable readings for CBI was
excluded from the isopleth map or why the lab diluted the sample. He also
testified that in 2000, after removing the waste oil tank, Meridian conducted soil
sampling that detected TPH and based on that result, it "ran an analysis for
volatile organics" and detected xylene, but not PCE. In contrast, Envirotactics
reported in 2006 that Meridian collected one soil sample from the area of the
waste oil tank, which was analyzed only for TPH.
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We are satisfied the court did not err in finding Neuffer rendered a net
opinion by inferring causation of the source of the PCE contamination without
supporting facts, scientific data, or methodology.
B.
Plaintiffs argue that the court erred in dismissing their claims against
O'Connor. They contend O'Connor was personally liable for the PCE
contamination under the tort participation theory, and that the operation of a dry
cleaners was an abnormally dangerous activity. Again, we disagree.
At the conclusion of plaintiffs' case, O'Connor's counsel moved for his
dismissal, arguing there was no evidence he engaged in any tortious conduct and
that he did not act in a personal capacity outside of his role as principal of Silver
Hanger. In granting the dismissal, Judge Perri stated there was no evidence to
suggest "O'Connor in any way was involved in or instrumental in moving either
PCE or PCE contaminated products out of the building to the location near the
back door where plaintiffs' expert identified the principal spill." She explained:
All of the contamination claims at issue in this case are
with regard to soil contamination. And according to
Neuffer, that contamination emanated from discharges
or spills that occurred outside of the leasehold for the
dry cleaner, but on the premises owned by the
Constantinou[s].
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So I find that there has been no evidence presented even
under the rigorous standard under Rule 4:37-2(b) from
which a reasonable fact finder could conclude that John
O'Connor was personally involved in the discharge of
PCE in a location where plaintiffs' expert has identified
it as having been migrated from the Constantinou
property to the Clarke Brothers property.
That is not to say that there may not ultimately be some
consideration of liability with regard to Silver Hanger
Manasquan by virtue of the actions of those non-
testifying witnesses. And the [c]ourt may draw
inferences with regard to that.
Following the ruling, plaintiffs' counsel requested an opportunity to brief
the issue of whether O'Connor could be held personally liable. The court granted
the request.
The next day, after additional oral argument on the issue, the court again
found that plaintiffs had not proven O'Connor was personally liable under the
participation theory for any discharge. Relying on Saltiel v. GSI Consultants,
Inc., 170 N.J. 297 (2002), the court concluded that plaintiffs did not sustain their
burden to show that O'Connor took part in the commission of a tort by the
corporation and that, "under the facts and circumstances of this case," there was
no other basis to impose personal liability on him.
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The court also found there was no evidence that the operation of a dry
cleaner was an abnormally dangerous activity or that the use of the commercially
available PCE was an abnormally dangerous activity.
At the close of a plaintiff's case, a defendant "may move for a dismissal
of the action or of any claim on the ground that upon the facts and upon the law
the plaintiff has shown no right to relief." R. 4:37-2(b). The standard for an
involuntary dismissal is whether "the evidence, together with the legitimate
inferences therefrom, could sustain judgment in plaintiff's favor." Ibid. Where
reasonable minds can differ, accepting as true the evidence supporting the
position of the non-moving party, and giving that party the benefit of all
reasonable and legitimate inferences, the court must deny the motion.
Verdicchio v. Ricca, 179 N.J. 1, 30 (2004). The court is not concerned with the
worth, nature or extent of the evidence, but only with its existence viewed most
favorably to the party opposing the motion. Dolson v. Anastasia, 55 N.J. 2, 5-6
(1969). We apply the same standard. Craggan v. IKEA USA, 332 N.J. Super.
53, 61 (App. Div. 2000).
The Spill Act provides that "any person who has discharged a hazardous
substance, or is in any way responsible for any hazardous substance, shall be
strictly liable, jointly and severally, without regard to fault, for all cleanup and
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removal costs no matter by whom incurred." N.J.S.A. 58:10-23.11g(c)(1); N.J.
Dep't of Envtl. Prot. v. Dimant, 212 N.J. 153, 175 (2012). The Spill Act defines
a discharge as "any intentional or unintentional action or omission resulting in
the releasing, spilling, leaking, pumping, pouring, emitting, emptying or
dumping of hazardous substance into the waters or onto the lands of the State,
or into waters outside the jurisdiction of the State when damage may result to
the lands, waters or natural resources within the jurisdiction of the State."
N.J.S.A. 58:10-23.11b. Although the Spill Act does not define the phrase "in
any way responsible," the Supreme Court has interpreted it to mean "ownership
or control over the property at the time of the discharge." Dep't of Env't Prot.
v. Ventron Corp., 94 N.J. 473, 502 (1983).
Plaintiffs argue that the plain language of the Spill Act imposes personal
liability on O'Connor because he had ownership or control over Atlantic
Cleaners at the time of a discharge of PCE. O'Connor, however, did not own or
control Manasquan Plaza or the Constantinou property. Moreover, although he
was aware of several instances of a PCE leak inside the containment tank
surrounding the machine, he testified there were no discharges of PCE into the
environment during the years he operated Atlantic Cleaners. Any leaks noted
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were enclosed in the containment tank. The record contains no evidence to the
contrary.
Plaintiffs further argue that, because a dry-cleaning facility is an
abnormally dangerous activity, O'Connor is strictly liable for damages resulting
from the PCE contamination on the CBI property. Because O'Connor was
strictly liable, plaintiffs contend they are not required to establish fault.
Plaintiffs' reliance on Ventron to support its argument is misplaced.
In Ventron, the Court held that "those who use, or permit others to use,
land for the conduct of abnormally dangerous activities are strictly liable for
resultant damages." Id. at 488. In that case, the defendant corporations dumped
toxic mercury into a nearby creek, and the defendant Ventron expressly assumed
the liability of one of them. Id. at 493.
Adopting the analysis in the Restatement (Second) of Torts § 520 (1977),
the Court stated that whether an activity was abnormally dangerous was
determined on a case-by-case basis after taking into consideration the following
factors:
(a) existence of a high degree of risk of some harm to
the person, land or chattels of others;
(b) likelihood that the harm that results from it will be
great;
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(c) inability to eliminate the risk by the exercise of
reasonable care;
(d) extent to which the activity is not a matter of
common usage;
(e) inappropriateness of the activity to the place where
it is carried on; and
(f) extent to which its value to the community is
outweighed by its dangerous attributes.
The Ventron Court concluded that "mercury and other toxic wastes were
'abnormally dangerous,' and the disposal of them, past or present, is an
abnormally dangerous activity." Id. at 493. See T&E Indus., Inc. v. Safety Light
Corp., 123 N.J. 371, 391, 394-95 (1991) (holding, under facts of case, the
defendants were strictly liable for harm caused by their "processing, handling,
and disposal" of radium).
Unlike Ventron, the operation of a dry-cleaning business does not qualify
as an abnormally dangerous activity given its "common usage," "value to the
community" and appropriateness of the activity to "the place where it is carried
on." See Restatement (Second) of Torts § 520 comment f ("In determining
whether the danger is abnormal, the factors listed in Clauses (a) to (f) . . . are all
to be considered, and are all of importance.").
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Moreover, O'Connor testified that Silver Hanger bought a containment
tank from the manufacturer of the dry-cleaning machine to catch leaks,
conducted daily measurements of PCE in the air, kept records of purchases and
disposal of PCE, and recorded leaks in inspection logs. He and the other
employees also received training on the use of the machinery. Thus, the
likelihood of harm was not great. Plaintiffs have not demonstrated the
applicability of any of the enumerated factors to categorize a dry-cleaning
business as an abnormally dangerous activity.
C.
Plaintiffs also contend the court erred by rejecting their argument that
O'Connor was personally liable under the tort participation theory. They
contend that he participated or cooperated in the commission of a tort by Silver
Hanger, and that he should not "escape the consequences of his individual
wrongdoing by saying that he acted on behalf of a corporation."
In Saltiel, the defendant corporation entered into a contract with the
plaintiff to design and prepare specifications for turf grass on athletic fields.
170 N.J. at 299. The plaintiff alleged the corporation was negligent in preparing
and designing the specifications and that its officers were personally liable
because they participated in the corporation's tort. Ibid. The sole issue on
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appeal was whether the court erred by granting summary judgment in favor of
the corporate officers. Id. at 302. To resolve the issue, the Court considered:
"(1) the proper application of the participation theory of personal liability for
tortious conduct by corporate officers under New Jersey law; and (2) whether
the plaintiff's claim against [two corporate officers] sounds in tort or contract."
Ibid.The Court noted that the "essence" of the participation theory is "that a
corporate officer can be held personally liable for a tort committed by the
corporation when he or she is sufficiently involved in the commiss ion of the
tort." Id. at 303. It explained that "a predicate to liability is a finding that the
corporation owed a duty of care to the victim, the duty was delegated to the
officer and the officer breached the duty of care by his own conduct." Ibid.Under this theory, a corporate officer can be held individually liable for tortious
conduct committed by the corporation if he or she participated in that conduct
and it resulted in injury to the plaintiff. Id. at 309.
The Court observed that most New Jersey cases applied the participation
theory to intentional torts such as fraud or conversion and that the theory also
applied to certain statutory violations. Id. at 304-05; see Allen v. V. & A. Bros.,
208 N.J. 114, 136 (2011) (holding individual liability for violation of Consumer
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Fraud Act depended on evaluation of specific source of claimed violation and
particular acts undertaken by individual); Van Natta Mech. Corp. v. Di Staulo,
277 N.J. Super. 175, 191 (App. Div. 1994) (holding corporate officer acting on
behalf of corporation was liable to persons injured by his or her own torts). The
Saltiel Court, however, held that the theory did not apply where breach of the
corporation's duty was governed by contract law. Id. at 309, 318 (holding
participation theory inapplicable because contract law governed duty of
corporate officers).
Here, plaintiffs presented no evidence that Silver Hanger or O'Connor
participated in negligent conduct. They do not cite actions performed by
O'Connor that constituted a breach of any duty owed by the corporation.
Instead, they argue that he operated Atlantic Cleaners for more than a decade
during which time he used PCE, and that he was "intimately involved in its
management and operation." They note that O'Connor handled, stored and
removed the PCE, that he oversaw "the management, oversight, and
implementation of policies concerning same," that he performed routine
maintenance on the dry-cleaning machine, and that he was in "exclusive
possession of the premises during the time the PCE was discharged and
discovered."
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However, O'Connor testified without contradiction that there were
policies for daily monitoring and handling of PCE, and that employees were
required to confirm their compliance by way of a "checklist." He stated that
every day the operator felt around the machine and looked underneath it for
leaks, inspected the pipe connections, fittings, couplings and valves, along with
the filter gaskets, solvent tanks, containers, and waste separator, and performed
daily leak inspections using a halogen detector. O'Connor also testified that
government authorities inspected the dry-cleaning machine over the years and
never cited Silver Hanger for noncompliance. Plaintiffs' conclusory arguments
that O'Connor participated in a tort are without any basis in the record. The trial
court did not err in dismissing plaintiffs' claims against O'Connor individually.
D.
Plaintiffs also contend the court erred in dismissing their claims asserted
under the ERA. Because we have determined that plaintiffs cannot sustain their
claims without expert evidence and the expert opinion rendered was net opinion
and not grounded in fact, there was no basis to support an ERA claim. In
addition, plaintiffs were not seeking to enforce environmental laws or pursuing
declaratory relief or civil penalties pursuant to the ERA. See N.J.S.A. 2A:35A-
4(a). They were seeking damages for the decreased value of their property,
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damages not permitted under the ERA. See Birchwood Lakes Colony Club, Inc.
v. Borough of Medford Lakes, 179 N.J. Super. 409, 414 (App. Div. 1981)
(stating the ERA does not provide for the recovery of money damages).
Affirmed.
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