ROBERT HULL v. WILLIAM LEWIS

(NOTE: The status of this decision is .)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5403-07T35403-07T3

ROBERT HULL, individually, and

POINT PLEASANT LANDCO, LLC, a

New Jersey Limited Liability Company,

Plaintiffs-Appellants,

v.

WILLIAM LEWIS, individually, and ROBERT

LEWIS, individually, d/b/a LEWIS

ENTERPRISES, NAYLORS GULF SERVICE

CENTER, INC., PURITAN OIL COMPANY, INC.,

d/b/a POINT BEACH CITGO, SHLOMO TEREN

and ESTHER TEREN,

Defendants,

and

ENVIRONMENTAL WASTE MANAGEMENT

ASSOCIATES, INC. and WACHOVIA

BANK, N.A., as successor in interest

to FIRST FIDELITY BANK, N.A.,

Defendants-Respondents.

_______________________________________

 

Argued May 12, 2009 - Decided

Before Judges Wefing, Parker and Yannotti.

On appeal from Superior Court of New Jersey,

Chancery Division, Ocean County, No. C-9-04.

Patrick J. Spina argued the cause for appellants

(Sodini & Spina, attorneys; Mr. Spina, of counsel

and on the briefs).

Geoffrey T. Bray argued the cause for respondent

Environmental Waste Management Associates, Inc.

(Bray, Miller & Bray, attorneys; Mr. Bray, of

counsel and on the brief).

Christine F. Marks argued the cause for respondent

Wachovia Bank, N.A. (Greenbaum, Rowe, Smith & Davis,

attorneys; John D. North, of counsel; Ms. Marks,

on the brief).

PER CURIAM

Plaintiffs appeal from a trial court order granting summary judgment to defendants Wachovia Bank, N.A., as successor in interest to First Fidelity Bank, N.A. ("Wachovia"), and Environmental Waste Management Associates, Inc. ("EWMA"). After reviewing the record in light of the contentions advanced on appeal, we affirm.

In 1993, Hull purchased property in Point Pleasant Beach from William Lewis and Robert Lewis, trading as Lewis Enterprises. He sought financing from Wachovia's predecessor, First Fidelity. Among Wachovia's conditions of the loan commitment was the "[r]eceipt and satisfactory review of Appraisal and Phase I Environmental Audit."

This clause was contained in Wachovia's loan commitment, not in Hull's contract to purchase the property. That contract gave Hull the right to have various inspections performed on the property, including an environmental inspection. Hull, however, did not exercise that contractual right.

Wachovia retained EWMA to perform the Phase I environmental audit. In its report to Wachovia, EWMA noted that it had conducted a "paper review" of the history of the site and a physical inspection of the facility, which contained a coin-operated laundry and two apartments. EWMA set forth the following conclusion:

Based on the site assessment, there are no obvious areas of environmental concern or potential sources of environmental contamination present on this site that would call for the implementation of a more detailed site investigation (sampling). The building appears to be in good condition and there was no physical evidence of spills, discharges or gross environmental contamination on the property.

Information pertaining to the use of PCE [perchloroethylene] at this site was not readily available at the time this report was written. Due to the relatively small dry-cleaning operation formerly conducted at this site, it is unlikely that the PCE was stored on-site in large quantities or in a capacity that would require the use of an underground storage tank. Since evidence of PCE storage or contamination was not observed during the site inspection it has not been listed as an area of obvious environmental concern.

When Wachovia received this report, it reviewed it and notified Hull that it considered the results satisfactory and that the loan would issue. Hull proceeded to close on the property. He was not provided with a copy of EWMA's audit.

In 2002, plaintiffs tried to sell the property to Land-Link Traffic Systems ("Land-Link"). Land-Link's contract called for a Phase II site investigation, and SSG, Inc., was retained to conduct that investigation. The results revealed that the groundwater was significantly contaminated with PCE. This litigation followed.

Plaintiffs alleged that both Wachovia and EWMA had a duty to notify plaintiffs of the results of the Phase I environmental audit that had been conducted at the time Hull purchased the property and their failure to do so was a breach. Plaintiffs sought damages for the cost of remediating this contamination.

Both Wachovia and EWMA moved for summary judgment. The trial court granted their motions, noting that there was no evidence within the record that Hull relied on the bank's satisfaction with the result of the Phase I environmental audit to close the transaction and that even if he had, said reliance would not be reasonable. Plaintiffs have appealed from the orders granting defendants' motions.

Plaintiffs contend that the trial court erred in granting defendants summary judgment because discovery had not yet been completed, because the trial judge failed to draw all legitimate inferences in their favor as the non-moving party and because genuine issues of material fact existed.

Motions for summary judgment are appropriately granted where the evidence "is so one-sided that one party must prevail as a matter of law." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)). Rule 4:46-2(c) provides that summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." Further, "[a]n issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c).

An appellate court applies the same standard as the trial court in reviewing an order granting summary judgment. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). First, the court decides whether there are any material facts genuinely disputed; then it decides whether the trial court applied the law correctly. Ibid.

Plaintiffs contend that the trial court did not follow this analytical model when considering defendant's motions and failed to recognize that the motions were premature because discovery had not been completed. They also contend that the trial court erred in finding that they could not reasonably rely upon Wachovia's "representations" and EWMA's audit.

We are not persuaded by plaintiff's assertion that discovery was incomplete. While summary judgment is generally inappropriate where discovery has not been completed, Crippen v. Cent. Jersey Concrete Pipe Co., 176 N.J. 397, 409 (2003), it was appropriate in this case, as plaintiffs have not pointed to any discovery that might reveal an issue of material fact. Plaintiffs argue that they should have been given an opportunity to depose representatives from the Bank and EWMA "to determine what they knew or should have known with regard to the contaminated property." Plaintiffs also take issue with the trial court's observation that the Bank's decision to approve the loan "might just as well have been a waiver on the part of the bank . . . ." Plaintiffs argue that such speculation was improper and that discovery should have been conducted to determine exactly what the Bank's intention was when it approved the loan.

The Bank's intention in approving the loan, however, is irrelevant to the instant dispute. Evidence is only relevant if it tends to prove or disprove a fact of consequence to the determination of the action. N.J.R.E. 401. The issue in this case is whether the plaintiffs reasonably relied on the EWMA report or the Bank's approval of the mortgage as an assurance that the property was not environmentally contaminated. The subjective intentions or knowledge of the defendants simply do not tend to prove or disprove that fact.

We are, moreover, satisfied that the trial court's analysis was entirely appropriate in terms of summary judgment practice.

Plaintiffs assert that the trial court's observation that the Bank's approval of the loan might just as well have signified a waiver constituted a failure to draw all legitimate inferences in their favor, as required by Rule 4:46-2(c). That assertion misses the mark. The issue is not whether the Bank subjectively intended the approval of the loan as an assurance that the property was free from environmental degradation, but whether the plaintiffs actually relied on this representation and whether such reliance was reasonable.

Finally, we reject plaintiffs' contention that they reasonably relied upon the bank's acceptance of EWMA's environmental audit. Having reviewed this record, we are satisfied that it contains no admissible evidence of such reliance on the part of plaintiffs.

Plaintiffs were served with requests for admissions which, among other items, asked for them to admit that plaintiffs' attorney relied upon the Phase I report in advising plaintiffs with respect to the purchase. Plaintiffs gave the following response:

After diligent inquiry, information known or readily obtainable is insufficient to enable an admission or denial. Upon information and belief it appears that [plaintiff's then-attorney] cannot find a copy of the report in his file and did not obtain a copy of the Phase I report prior to closing. (See copy of 2/11/03 letter attached as Exhibit A) Further, upon information and belief after reasonable inquiry, [he] advised Mr. Hull that the bank had obtained the Phase I assessment per the mortgage commitment and the bank notified him that it was "clear", so Mr. Hull proceeded to closing, obligating himself on the mortgage and in the purchase of the property.

Further, Robert Hull was asked to admit that he had relied on EWMA's Phase I audit in deciding to purchase the property. To this, he made the following response:

Objection, improper question, goes to the ultimate issue for trial. Notwithstanding and without waiving said objection, [plaintiff's then-attorney] advised Mr. Hull that the bank had obtained the Phase I assessment per the mortgage commitment and that the bank notified him that it was "clear", so Mr. Hull proceeded to closing, obligating himself on the mortgage and the purchase of the property.

There is no statement in this record from plaintiff Hull that he relied in any fashion on the bank's declaration that it considered the result of the environmental audit to be satisfactory for its purposes. Nor is there any statement by Hull in this record that he relied in any fashion on the contents of the EWMA environmental audit in proceeding to close this transaction. Absent such a statement, there is no need to even consider whether reliance, if it had occurred, would have been reasonable. The record would not support a finding that such reliance in fact took place.

The order under review is affirmed.

In the balance of the opinion, we shall refer simply to Wachovia.

Hull had in the interim transferred the property to plaintiff Point Pleasant Landco, LLC, of which he was the principal. We note for the sake of completeness that plaintiffs also sued those who sold the property to Hull, as well as adjoining property owners. Plaintiffs have resolved their claims against those defendants.

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A-5403-07T3

June 11, 2009