Morristown Associates v. Grant Oil Co., A-0313-11T3; Appellate Division; opinion by Ashrafi, J.A.D.; decided and approved for publication August 23, 2013. Before Judges Graves, Ashrafi and Guadagno. On appeal from the Law Division, Morris County, Docket No. L-2071-06. D.D.S. No. 17-2-1088 [21 pp.]
Plaintiff Morristown Associates, the owner of a shopping center, seeks contribution to its environmental remediation costs from several heating oil companies and the prior owners of a dry cleaning business. The Law Division granted summary judgment or partial summary judgment to several defendants on statute of limitations grounds.
Before plaintiff purchased the shopping center in 1979, Plaza Cleaners, one of the tenants, had had a storage tank installed under a concrete slab floor to hold heating oil used in its business. The fill and vent lines for the UST protruded through an exterior wall into an alleyway.
Plaintiff claims it first became aware of the UST in 2003 when an adjoining property owner discovered oil in a monitoring well and Plaza Cleaners was identified as the source. Plaintiff's metallurgical expert said the fill pipes had become corroded and had holes.
Frank Cosentino, a former vice president of the management company that operated the shopping center from 1988 to 1995 and again starting in 2002, testified that he never saw anything to indicate there was a UST or any environmental problems at Plaza Cleaners. An environmental audit, completed in 1993 as part of mortgage refinancing, found no USTs on the site.
However, documents revealed that in 1999, a different UST in the shopping center had leaked and required remediation. Plaintiff's then property management company had the tank removed. Samuel Ekstein, that company's owner, testified in deposition that he discussed the tank removal with a representative of plaintiff. Ekstein knew there was a tank at Plaza Cleaners.
On appeal, plaintiff argues the trial court erred because the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.24, does not contain a statute of limitations and the general six-year limitations period for property damage under N.J.S.A. 2A:14-1 does not apply to its Spill Act contribution claims.
Held: The general six-year statute of limitations for damage to property, N.J.S.A. 2A:14-1, applies to a private claim for contribution pursuant to the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.24. The discovery rule of Lopez v. Swyer, 62 N.J. 267 (1973), may extend the time limitation. However, the trial court did not err in concluding that the discovery rule did not warrant permitting plaintiff to pursue claims that arose outside the six-year limitation period.
The panel notes Pitney Bowes v. Baker Industries, Inc., 277 N.J. Super. 484 (App. Div. 1994), which held that N.J.S.A. 2A:14-1.1, which is a statute of repose, not a statute of limitations, did not apply to bar an action for contribution in an environmental contamination case. Five years later, an unpublished opinion applied Pitney Bowes and held that no statute of limitations applies.
However, federal courts have taken a different approach, holding that the six-year statute of limitations will be applied to claims under the Spill Act. The panel says applying a statute of limitations to Spill Act contribution claims is consistent with the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. § 9613(g)(2)(B), which establishes a six-year limitations period for actions to recover costs expended in a "remedial action" to clean up a hazardous waste site.
The panel says Pitney Bowes is not controlling with respect to a statute of limitations. A statute of repose is strictly applied to bar a claim without any regard to when the claimant discovered or could reasonably have discovered the harm. In contrast, the discovery rule is applicable to a statute of limitations to mitigate the harsh and unjust result that would flow from barring a blameless, injured person who is unaware that he has suffered an injury.
Applying a statute of limitations to a claim for private contribution under the Spill Act does not prevent a diligent plaintiff from recovering the costs of cleanup and remediation from other responsible parties. It merely requires that a claimant file a timely action after it discovered or should have discovered the grounds for its claim. Unlike the statute of repose, the statute of limitations is not "patently repugnant or inconsistent" with the purposes of the Spill Act.
The panel says the general statutes of limitations have been applied to a variety of statutory claims that do not contain express periods of limitation. Case law has held that when the Legislature creates a statutory cause of action without including a limitations provision, a court will apply the general limitations provision which governs that category of claim. When the Legislature amended the Spill Act to provide for a private right of contribution, it is presumed to have been aware of the application of the general statute of limitations to causes of action in New Jersey courts. Nothing in the act states that a limitations period shall not apply to such claims. The trial court correctly held that a six-year statute of limitations applies to plaintiff's Spill Act and other claims.
Plaintiff argues alternatively that it was entitled to the benefit of the discovery rule. It argues its causes of action accrued no earlier than August 2003 when its property management company, through Cosentino, learned of possible contamination caused by a UST at Plaza Cleaners.
The trial court concluded that plaintiff should reasonably have discovered the contamination at Plaza Cleaners no later than 1999, when a UST had to be removed under DEP oversight since it was put on notice that the 1993 environmental report, which failed to discover any UST's on the property, was inaccurate. Plaintiff should have exercised due diligence and supervision over its property to investigate whether any additional UST's existed. Also, the fill and vent pipes were clearly visible and oil deliveries were not done secretly. Further inquiry should have revealed evidence of a faulty system.
The trial court concluded the circumstances did not warrant application of the discovery rule. The panel sees no reason to disagree with that conclusion.
For appellant/cross-respondent — Steven T. Singer. For respondents/cross-appellants Petro, Inc., Johnson Oil Company and Meenan Oil Co. — Richard J. Isolde (Gaul, Baratta & Rosello, L.L.C.). For respondents Edward Hsi and Amy Hsi — David W. Field (Lowenstein Sandler, P.C.). For respondent Spartan Oil Company — Kristin V. Hayes (Wiley Malehorn Sirota & Raynes; Hayes and Carolyn Conway Duff on the brief).