Bulletin Board Magazine 2019 Volume 1

Legal/Legislative Continued

Terranova’s expert in that case categorically denied this possibility, effectively precluding Terranova from asserting liability against any other parties. In ruling on judicial estoppel, the Terranova court found that these “disclosures by Puccio and Friedman were sufficient to put plaintiffs on notice of possible claims under the Spill Act….” This decision puts a premium on identification of all PRPs as early as possible, which is unusual considering the nature of Spill Act cases which evolve over time and often require extensive historic records to identify all PRPs. “Application of the doctrine does not preclude property owners from seeking contribution from dischargers under the Spill Act. It simply compels owners to pursue, in a single action,

dischargers which are known or reasonably knowable from the circumstances.” The court warned against “floating a lazy cast toward one discharger and then shooting a second line toward others, seeking contribution for clean-up of the same property.” The Terranova holding emphasizes the importance of hiring a team of environmental professionals and attorneys who can work together to ensure that every possible discharger is brought into any contribution claims. In this case, it appears Plaintiffs’ consultant did not identify all possible dischargers, and discounted information presented regarding potential additional sources. When Plaintiffs later hired a new environmental consultant, it found soil and

groundwater contamination associated with a gasoline business from 1963-2000, opening up a new world of PRPs. Unfortunately for Plaintiffs, the initial consultant’s testimony that Puccio and Friedman were solely responsible for the contamination precluded their ability to claim that other PRPs were responsible. This preclusion was particularly disastrous here, where Puccio and Friedman were unable to satisfy the judgment, which may have been prevented had a broad based approach been employed in the PRP investigation.

determined that any such communications were subject to disclosure and must be examined by the trial court. The court held that recusal is necessary where there is evidence that the board member and the applicant discussed the merits of the application ex parte. It is “essential… to the integrity of local governments that public officials who serve on municipal boards abstain from ex parte communications pertaining to matters before them and insulate themselves from any outside influences.” This holding, while unpublished, is key to understanding which contacts with municipal representatives will constitute a conflict of interest. Applicants should avoid any contact with the individuals voting on an application, as those communications are subject to public disclosure, and may constitute ex parte communications requiring recusal. But this case presents a unique problem for boards with professionals serving in dual roles as voting members. Communications with board engineers and other professionals are common and appropriate, especially where the professional has questions or concerns that the applicant seeks to address prior to the hearing. Applicants must carefully examine the identities of board professionals to determine whether any of those individuals are also voting board members. Under those circumstances where the board professional is also a voting member of the board, any communications should be limited and should occur through an intermediary, such as the board secretary. JUDICIAL ESTOPPEL AVALID DEFENSE TO SPILL ACT CLAIMS Terranova v. Gen. Elec. Pension Trust, et al. On January 4, 2019, New Jersey’s Appellate Division confirmed that judicial estoppel is a valid defense against Spill Act claims for

Morristown Assocs. v. Grant Oil Co., 220 N.J. 360, that the statute of limitations is not an available defense to Spill Act claims, because the contribution defendant is limited to only those defenses set forth in the Spill Act, specifically “an act or omission caused solely by war, sabotage, or God, or a combination thereof….” The Appellate Division attempted to resolve this inconsistency by distinguishing legislatively-created statutory defenses from judicially-created equitable defenses. The court ruled that as an equitable doctrine, judicial estoppel is “not a defense subject to any overriding legislation, and as such, it may be maintained against a Spill Act claim.” Turning to the question of whether the doctrine should apply to the facts of the case, the court reviewed the standard. “Judicial estoppel most commonly applies when a party takes inconsistent positions in different legal actions… and the party succeeds in maintaining one of those positions...” Citing several precedential opinions, the court concluded, “[i]f a court has based a final decision, even in part, on a party’s assertion, that same party is thereafter precluded from asserting a contradictory position.” The Appellate Division also focused on the facts asserted during the arbitration, stressing that: During the arbitration proceedings, [Terranova] advanced, to great effect, evidence that the property was contaminated only when Puccio and Friedman were in possession. The decision to disregard the possibility that other dischargers – from whom plaintiffs now seek contribution – were responsible under the Spill Act and pursue only Puccio and Friedman is the type of inconsistent practice necessitating application of the judicial estoppel doctrine. In other words, Puccio and Friedman offered evidence during the prior litigation that other sources were responsible for the contamination.

Bulletin Board | 43 | www.shorebuilders.org estoppel is a valid defense against Spill Act claims for contribution, despite the fact that it is not one of the few defenses specifically listed in the Spill Act. The ruling seems to contravene the New Jersey Supreme Court holding in contribution in Terranova et al., v. Gen. Elec. Pension Trust et al., App. Div. Docket No. A- 5699-16T3. The Terranova case illustrates the importance of collaboration and open communication between a PRP and its environmental consultants and attorneys. Plaintiffs owned a property that was undergoing cleanup subject to the NJ Spill Act, N.J.S.A. 58:10-23.11 to 23.24. Plaintiffs claimed that Defendants were dischargers liable for contribution under the Spill Act due to their historic ownership interests in the property. During discovery, Defendants uncovered a 2010 litigation wherein Plaintiffs brought a similar contribution claim against former lessees, Puccio and Friedman. In that case, Plaintiffs successfully argued that Puccio and Friedman were solely responsible for the contamination. After proceeding to arbitration, Judge Longhi adopted the findings set forth in Plaintiffs expert report, and found that Puccio and Friedman were liable for remediation costs and to take over the remediation. Puccio and Friedman did not comply with the judgment. The trial court found that judicial estoppel precluded the contribution claims because Plaintiffs successfully asserted in the Puccio/ Friedman action that Puccio and Friedman were the only culpable dischargers. Plaintiffs appealed, arguing that the doctrine of judicial estoppel should not be applicable in the context of a Spill Act claim, due to the complexities of environmental investigations and the broad remedial purpose of the Spill Act. The Appellate Division affirmed the trial court’s grant of summary judgment on the basis of judicial estoppel. The court held that judicial

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