New Jersey’s Appellate Division provided clarification as to what defenses may be asserted in an action brought under the New Jersey Spill Compensation and Control Act (“Spill Act”) in the recent decision of Matthew Terranova, et al. v. General Electric Pension Trust, et al., when it determined that the equitable defense of “judicial estoppel” is available to defendants in such actions.
Plaintiffs were the owners of real property which was leased to two defendants, Friedman and Puccio, from 1981 to 2008 for use as a gas station. In 2010, one of the plaintiffs commenced an action against Friedman and Puccio for contribution under the Spill Act, contending that they had discharged contaminants onto the property. The matter was arbitrated before a retired judge, who adopted the findings of the plaintiff’s expert, and found for the plaintiff in the amount of $45,000. This award was reduced to a final judgment in 2012, and it appears as though Friedman and Puccio did not live up to the judgment’s obligations, as far as remediating the property.
Ultimately, the plaintiff retained a different expert to consult with regarding the remediation process. This expert determined that soil and groundwater contamination had begun on or before 1963, and continued until 2000, when certain tanks were removed. Plaintiffs then commenced an action against various other defendants who allegedly were “dischargers” of contamination from 1963 to 1981. During the course of discovery, these defendants discovered the prior action against Friedman and Puccio, and filed motions for summary judgment under the doctrines of collateral estoppel and the entire controversy doctrine.
Plaintiff contended, on appeal, that judicial estoppel was not an available defense to Spill Act claims, because it was not expressly enumerated in the statute. The statute enumerates several defenses, including “an act or omission caused solely by war, sabotage, or God, or a combination thereof.” N.J.S.A. 58:10-23.11g(d). This statutory language had been relied upon by the New Jersey Supreme Court in Morristown Assocs. v. Grant Oil Co., 220 N.J. 360 (2015), when the Court determined that the statute of limitations did not apply because it was not specifically enumerated. However, the Court in Morristown Associates made clear that the exclusion of certain defenses would not deprive defendants of unlisted defenses such as challenges to venue, service of process, and subject matter jurisdiction, which defenses are established by court rule, and are not subject to overriding legislation. The statute of limitations, on the other hand, was a creation of the Legislature, and thus deemed subject to the Spill Act’s limitations.
The Terranova court determined that judicial estoppel is not a defense subject to any overriding legislation, and may be maintained against a Spill Act claim. The defense is not created expressly by a court rule, but is required by rule to be expressly pled. The doctrine “applies to preclude a party from assuming a position in a legal proceeding inconsistent with one previously asserted.” Cummings v. Bahr, 295 N.J. Super. 374, 385 (App. Div. 1996).
The Court determined that the plaintiffs here were guilty of the exact type of conduct that judicial estoppel was meant to preclude. The plaintiffs had contended that Friedman and Puccio were the sole culpable dischargers on the subject property, and had disputed those parties’ claims that they were not the solely culpable dischargers. The plaintiff advanced, “to great effect” its evidence that the property was contaminated only when Friedman and Puccio were in possession. Their defenses put the plaintiffs on notice of other possible dischargers, and the plaintiffs’ failure to take action against them precluded subsequent action taking a contrary position.
This decision applies particularly to the doctrine of judicial estoppel, but also clearly holds that other equitable defenses apply to Spill Act claims.
“[P]laintiffs are precluded from floating a lazy cast toward one discharger and then shooting a second line toward others, seeking contribution for clean-up of the same property.”
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