ALLWOOD INVESTMENT COMPANY v. JOGAM CORP.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ALLWOOD INVESTMENT COMPANY,

Plaintiff-Respondent,

v.

JOGAM CORP., d/b/a SAVEWAY

DRIVE-IN CLEANING CORP.,

and/or SAVEWAY DRY CLEANING

CORP., and/or SAVEWAY CLEANERS;

STEPHEN SCHWARTZ a/k/a STEVEN

SCHWARTZ; and DORIS SCHWARTZ,

Defendants-Appellants.

________________________________________________________________

September 18, 2015

Argued May 18, 2015 Decided

Before Judges Espinosa and St. John.

On appeal from Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-1847-10.

Robert J. Donaher argued the cause for appellants (Walder Hayden, P.A., attorneys; Justin P. Walder, of counsel; Mr. Donaher and Jeffrey A. Walder, on the briefs).

John M. Scagnelli argued the cause for respondent (Scarinci & Hollenbeck, LLC, attorneys; Mr. Scagnelli, of counsel and on the brief; William C. Sullivan, on the brief).

PER CURIAM

Defendants appeal from the entry of judgment against them in this environmental cleanup case. We affirm, substantially for the reasons set forth in the written decision of Judge Thomas J. LaConte, J.S.C.

During the course of this litigation, a joint pretrial order was entered, which included stipulated facts. Moreover, because the facts regarding this matter are set out at length in Judge LaConte's written opinion, they need not be repeated at length here.

In 1957, Saveway Drive-In Cleaning Corp. (Saveway Corp.) began operating a dry cleaning business at the subject property (the Property) in Clifton. Plaintiff Allwood Investment Company (Allwood) purchased the property in 1971. Defendant Jogam Corp. (Jogam) purchased the dry cleaning business from Saveway Corp. in 1982.

In 1992, Allwood and Jogam entered into a new lease (1992 Lease), which was extended by consent twice, resulting in a term that expires in 2017. In a Rider to the 1992 Lease, Jogam acknowledged its business utilized perchloroethylene (PCE) and that it was solely responsible for the proper handling and disposal of PCE. Jogam agreed to a number of conditions, which included the following. It "would not cause or permit to exist. . . intentional or unintentional" discharges of hazardous substances. If Jogam's operations subjected Allwood to a claim based upon a violation of environmental laws, Jogam agreed to immediately remediate such conditions at its own expense. Jogam agreed to indemnify Allwood from any damages or expenses "caused by discharges of hazardous substances or wastes which occurred as a result of Jogam's occupancy during the term of the lease." Further, Jogam agreed its obligations under the Rider would survive the expiration or termination of the 1992 Lease. Stephen Schwartz and Doris Schwartz (the Schwartz defendants),1 who each own 50% of Jogam, executed a guaranty of the 1992 Lease (the Guaranty).

Environmental investigations were conducted at the Property in 2002 and in 2009. Elevated concentrations of PCE in the groundwater and soil samples exceeded standards established by the New Jersey Department of Environmental Protection (NJDEP). Inspections and samplings conducted in 2009, and in 2011, after this litigation was initiated, continued to reveal elevated PCE concentrations in multiple locations. During the 2009 investigations, the highest levels of PCE in an interior boring were immediately below the building floor slab. A sample of sludge collected from an open-top bucket positioned at the end of the dry cleaning machine yielded a high concentration of PCE.

In 2010, Allwood filed the instant complaint. The claims asserted against Jogam were breach of contract (count one), strict liability for all cleanup costs pursuant to the New Jersey Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to 23.24 (count two), strict liability (count three), nuisance (count four) and waste (count five). The complaint also asked the court to grant injunctive relief, ordering Jogam to immediately investigate and remediate the environmental contamination of the Property, and for the Schwartz defendants to be liable for all damages and other relief pursuant to the Guaranty.

Defendant filed an answer and counterclaim, asserting a contribution claim against Allwood under the Spill Act. Its Rule 4:5-1 certification identified Saveway Drive-In Cleaning Corp., the estate of Max Stauber, Henrietta Stauber and Edward Cassatly as "additional parties who have conducted operations at the premises, including the possible use of hazardous substances, who may potentially be responsible for the contamination alleged by Plaintiff." However, neither party ever joined these parties in the litigation.

Following discovery, plaintiff moved for summary judgment and injunctive relief. Defendants filed a cross-motion, asking the court to find Allwood liable for contribution under the Spill Act. Judge LaConte granted partial summary judgment to both parties, finding both plaintiff and defendants liable, and ordering defendants to immediately retain a licensed site remediation professional to investigate and remediate the environmental contamination on the property.

A hearing was conducted to determine the allocation of responsibility for the cleanup costs. Judge LaConte issued an extensive written opinion, setting forth his reasons for holding defendant solely responsible for the contamination and the cleanup under the Spill Act, the Lease and Guaranty.

In their appeal, defendants first argue the trial court erred in failing to hold that plaintiff's claims were barred by the general six-year statute of limitations, N.J.S.A. 2A:14-1. The specific issue before the Court in Morristown Associates v. Grant Oil Company, 220 N.J. 360 (2015), was "whether the general six-year statute of limitations contained in N.J.S.A. 2A:14-1 applies to private claims for contribution made" under the Spill Act. The Court held the "six-year statute of limitations is not applicable to Spill Act contribution claims," basing its decision on the plain language of the statute and its legislative history. Id. at 364. Morristown Associates therefore disposes of defendants' statute of limitations argument as to plaintiff's Spill Act claim.

At oral argument, defendants argued that the statute of limitations remained applicable to bar plaintiff's breach of contract claim. Pursuant to the terms of the 1992 Lease and Rider, Jogam assumed obligations regarding environmental issues that survived even the expiration of the Lease. We conclude the statute of limitations argument lacks sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).

Defendants also argue the trial court committed plain error "in its uniformly erroneous legal rulings on the burden of proof, application of joint and several liability and the evidentiary standards applicable to Allwood's Spill Act contribution claim." Specifically, defendants contend the trial court: (1) failed to distinguish between government cost recovery actions and private contribution claims; (2) erroneously assumed Allwood was an innocent property owner and improperly assigned the burden of proof to Jogam; (3) erred in assigning joint and several liability; (4) imposed legally unfounded evidentiary burdens upon defendants and (5) made a finding of exclusive liability that was not authorized under the Spill Act or any proper equitable allocation under the "Gore factors."2

It is a well-settled principle that "our appellate courts will decline to consider questions or issues not properly presented to the trial court when an opportunity for such a presentation is available unless the questions so raised on appeal go to the jurisdiction of the trial court or concern matters of great public interest." US Bank Nat. Ass'n v. Guillaume, 209 N.J. 449, 483 (2012) (quoting Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973)(internal quotation marks omitted)). The arguments raised by defendants as plain error do not concern either jurisdiction or a matter of great public interest.

The judge's findings of fact that are challenged by defendants are entitled to our deference because they are supported by adequate credible evidence in the record, which Judge LaConte has set forth in his written opinion. Turning to the challenges to the judge's application of law and determination that Jogam is exclusively liable for the cleanup, we briefly review applicable legal principles.

The Spill Act "is remedial legislation designed to cast a wide net over those responsible for hazardous substances and their discharge on the land and waters of this state." Morristown Assocs. supra, 220 N.J. at 383. It "provides a right of contribution for 'dischargers or persons [who] clean[] up and remove[] a discharge of a hazardous substance' against 'all other dischargers and persons in any way responsible for a discharged hazardous substance or other persons who are liable for the cost of the cleanup and removal.'" Id. at 380 (quotingN.J.S.A. 58:10-23.11f(a)(2)(a)). The Legislature imposed joint and several strict liability "without regard to fault, for all cleanup and removal costs" upon all such responsible persons. N.J.S.A. 58:10-23.11g(c). The Supreme Court has held, "in an action to obtain damages, authorized costs and other similar relief under the Act, there must be shown a reasonable link between the discharge, the putative discharger, and the contamination at the specifically damaged site." N.J. Dept. of Envtl. Prot. v. Dimant, 212 N.J. 153, 182 (2012). "In resolving contribution claims, a court may allocate the costs of cleanup and removal among liable parties using such equitable factors as the court determines are appropriate." N.J.S.A. 58:10-23.11f(a)(2)(a). Therefore, the Legislature granted courts broad authority in the selection and application of equitable factors for the allocation of cleanup costs.

In this case, it is undisputed that Jogam was responsible as a discharger under the Spill Act. Jogam was, therefore, jointly and severally liable for the cleanup. Judge LaConte noted there was no evidence of any PCE discharges on the Property prior to Jogam's purchase of the dry cleaning business in 1982. The only contribution claim Jogam made was against Allwood, described by the court as a passive landlord. No contribution claim was asserted against the prior operators of the dry cleaning business. In addition, the 1992 Lease and Rider provided independent grounds for the imposition of liability upon Jogam.

We discern no reason to disturb the trial judge's factfinding, application of legal principles or allocation determination.

Affirmed.

1 Unless otherwise specified, we use "defendant" to refer to Jogam.

2 The "Gore factors" were proposed as an amendment to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 by then-Congressman Al Gore. Although the amendment was not passed, New Jersey courts have used the Gore factors to aid in the equitable allocation of contribution costs. Lenox Inc. v. Reuben Smith Rubbish Removal, 91 F. Supp. 2d 743 (D.N.J. 2000). See, e.g., Magic Petroleum Corp. v. Exxon Mobil Corp., 218 N.J. 390, 403-05 (2014).