Title: State of NJDEP v. Caldeira, et al.

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

Joseph Caldeira, Sr., was the owner and operator of the Southern Ocean Landfill, Inc. (SOLF), an entity that operated a sanitary landfill in Ocean County. He also owned and operated Caldeira Brothers, a solid waste collection utility company, and Forcees, Inc., an equipment leasing company that provided equipment exclusively for his solid waste entities. The landfill stopped accepting waste in 1988 after it reached its full capacity. Pursuant to the Sanitary Landfill Closure and Contingency Fund Act ( Closure Act ), N.J.S.A. 13:1E-100 et seq., SOLF submitted a closure plan to the DEP. It was estimated that the closure of SOLF would cost $23 million. Because it had reached full capacity, however, the landfill stopped generating sufficient revenues to fund the closure. In 1989, Caldeira, Sr., transferred 99% of his stock in Caldeira Brothers to his son, as well as all of his stock in Forcees, Inc.. In 1991, Caldeira, Sr., on behalf of SOLF, and Caldeira, Jr., on behalf of Caldeira Brothers, entered into an agreement in which SOLF agreed to forgive a $600,000 indebtedness owed to it by Caldeira Brothers for tipping fees. Subsequently, as a result of a series of transactions, all of the assets belonging to Caldeira Brothers and Forcees were acquired by USA Waste Recycling of New Jersey, Inc.. On November 24, 1997, the DEP filed a Closure Act enforcement proceeding against SOLF and Caldeira, Sr., both individually and as owner of SOLF. The DEP alleged improper operation of the landfill, failure to implement a closure and post-closure care plan in violation of the Closure Act, and that spillage of leachate from the landfill into the area surrounding it was imminent and threatened the surrounding environment. It was during discovery in the closure action that the DEP learned of the asset transfers between Caldeira, Sr. and Caldeira, Jr., and the $600,000 debt forgiveness. Consequently, on April 23, 1999, the DEP filed a new complaint under the UFTA, naming Caldeira, Sr., Caldeira, Jr., SOLF, Caldeira Brothers, Inc., and USA Waste as party defendants. The complaint alleged that Caldeira, Sr. and his son engaged in a series of fraudulent transfers in order to avoid liability under the Closure Act. The DEP requested, among other relief, that the transfers be voided; that an accounting take place; that the proceeds of the transfers be held in escrow to underwrite the closure of SOLF s landfill; and, that an injunction be issued to preclude interference with those proceeds. Following motions and cross-motions to dismiss, the trial court dismissed the DEP s complaint against U.S.A. Waste and Caldeira, Jr., as time-barred under the UFTA four-year/one-year statute of limitations. The court, however, did not dismiss the complaint against Caldeira, Sr., applying instead the general ten-year statute of limitations under N.J.S.A. 2A:14-1.2. The court refused to dismiss the complaint regarding the Forcees transfer because there was no proof that the DEP had notice of it more than a year prior to litigation. That matter is currently pending before the Law Division. The DEP appealed, and both Caldeiras cross-appealed. The Appellate Division held that the UFTA four-year time limitation applied to all of the defendants, including Caldeira, Sr., New Jersey Dept. of Environmental Protection v. Caldeira, 338 N.J. 203 (App. Div. 2001). The Appellate Division found that the term claimant in the UFTA statute of limitations is synonymous with creditor; that the term creditor refers to a person who has a claim; and that the statutory definition of person includes a governmental agency. The court further held that the cause of action in respect of the transfer of stock was also barred by the four-year statute of limitations and that the one-year tolling provision of N.J.S.A. 25:2-31 was not applicable because the claim was brought more than one year after the DEP knew or reasonably could have discovered the transfer. The Supreme Court granted the DEP s motion for leave to appeal. HELD: The DEP action in this case was timely under the ten-year statute of limitations of N.J.S.A. 2A:14-1.2. Under the common law doctrine of nullum tempus occurrit reqi ( no time runs against the king ), a statute of limitations did not bar an action brought by the government. New Jersey courts resorted to the doctrine regularly to avoid applying statutes of limitations against the State. In a series of 1991 opinions, however, this Court abolished the nullum tempus doctrine insofar as it would preclude the application of general statutes of limitations to the State. In response, the Legislature enacted N.J.S.A. 2A:14-1.2, which provides a general ten-year limitations period for actions brought by the State or its agencies: Except where a limitations provision expressly and specifically applies to actions commenced by the State . . .. Two other relevant limitations are N.J.S.A. 25:2-31, which provides a four-year limit for actions concerning fraudulent transfers generally, as well as a one-year discovery provision for actions alleging actual fraud, and N.J.S.A. 58:10B-17.1, a statute of limitations specific to certain environmental claims. (Pp. 3-8) As a general rule of statutory construction, courts look first to the language of the statute. If the statute is clear and unambiguous on its face and admits of only one interpretation, courts need look no deeper than the act s literal terms to discover the Legislature s intent. (Pp. 16-17) For a statute of limitations shorter than ten years to apply to the State, it would have to be fairly explicit, as expressly and specifically required by N.J.S.A. 2A:14-1.2. Although the word person in the UFTA statute is defined to include the State, the UFTA statute of limitations is a general provision that does not expressly and specifically apply to the State. (Pp. 17-21) The recently enacted site remediation statute, N.J.S.A. 58:10B-17.1, is inapplicable here because the action is not one that arises under New Jersey s environmental laws, the use of proceeds from the UFTA action for closure purposes notwithstanding. The environmental laws and the UFTA serve different purposes and are distinct from each other. (Pp. 21-22) The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division for further proceedings consistent with the Court s opinion. CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, and ZAZZALI, join in Justice LONG s opinion. JUSTICES VERNIERO and LaVECCHIA did not participate. STATE OF NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff-Appellant, v. JOSEPH J. CALDEIRA, JR., individually, and as Owner, Operator, Manager, Director, Officer and/or Shareholder of FORCEES, INC., and CALDEIRA BROTHERS, INC., JOSEPH J. CALDEIRA, SR., individually, and, as prior Owner, Operator, Manager, Director, Officer and/or Shareholder of FORCEES, INC., CALDEIRA BROTHERS, INC., and SOUTHERN OCEAN LANDFILL, INC., and U.S.A. WASTE RECYCLING OF NEW JERSEY, INC., a corporation of the State of New Jersey and corporate successor to Caldeira Brothers, Inc., Defendants-Respondents, and SOUTHERN OCEAN LANDFILL, INC., a corporation of the State of New Jersey, Defendant. Argued January 15, 2002 Decided April 8, 2002 On appeal from the Superior Court, Appellate Division, whose opinion is reported at 338 N.J. Super. 203 (2001). Lisa Tichauer Wahler, Deputy Attorney General, argued the cause for appellant (David N. Samson, Attorney General of New Jersey, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel). James O'Toole, Jr., argued the cause for respondent U.S.A. Waste Recycling of New Jersey, Inc.(Saul Ewing, attorneys; Mr. O Toole, Jane Kozinski, James A. Keller and Jennifer M. Vlack, on the briefs). Kevin N. Starkey argued the cause for respondent Joseph J. Caldeira, Sr., etc. (Starkey Kelly Blaney & White, attorneys; Charles E. Starkey, of counsel; Dina R. Khajezadeh, on the briefs). David J. Haber submitted a brief on behalf of respondents Joseph J. Caldeira, Jr., etc., Forcees, Inc. and Caldeira Brothers, Inc. The opinion of the Court was delivered by LONG, J. We are called on here to resolve the question of which statute of limitations should apply to a fraudulent transfer action brought by the State Department of Environmental Protection (DEP). Implicated are the one- and four-year limitations set forth in the Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2-31; the ten-year limitation that generally applies to civil actions brought by the State under N.J.S.A. 2A:14-1.2; and the statute of limitations governing actions in connection with a landfill closure, N.J.S.A. 58:10B-17.1. The Appellate Division ruled that the four-year UFTA statute barred the DEP action. We hold that in these circumstances the DEP action was timely under the ten-year limit of N.J.S.A. 2A:14-1.2. We therefore reverse and remand the case for trial. a. Under [N.J.S.A. 25:2-25(a) (actual fraud)], within four years after the transfer was made or the obligation was incurred or, if later, within one year after the transfer or obligation was or could reasonably have been discovered by the claimant; [or] b. Under [N.J.S.A. 25:2-25(b) (constructive fraud)], . . . within four years after the transfer was made or the obligation was incurred[.] [N]o cause of action shall be deemed to have accrued prior to January 1, 2002 or until the contaminated site is remediated or the sanitary landfill had been properly closed, whichever is later. STATE OF NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff-Appellant, v. JOSEPH J. CALDEIRA, JR., Individually, and as Owner, Operator, Manager, Director, Officer and/or Shareholder of FORCEES, INC., etc., et al. Defendants-Respondents. DECIDED April 8, 2002 Chief Justice Poritz PRESIDING OPINION BY Justice Long CONCURRING OPINION BY DISSENTING OPINION BY