Court Opinion

ID: 4430567
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:43:43.255125+00
Date Added: 2024-06-11T13:27:48.127386
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                   APPROVAL OF THE APPELLATE DIVISION
  This opinion shall not "constitute precedent or be binding upon any court."
   Although it is posted on the internet, this opinion is binding only on the
     parties in the case and its use in other cases is limited. R. 1:36-3.

                                    SUPERIOR COURT OF NEW JERSEY
                                    APPELLATE DIVISION
                                    DOCKET NO. A-4439-15T2

IN THE MATTER OF HAZARDOUS DISCHARGE SITE
REMEDIATION FUND PUBLIC ENTITY GRANT
APPLICATION FOR REMEDIAL INVESTIGATION
AND REMEDIAL ACTION.
______________________________________________

           Argued August 14, 2018 – Decided August 29, 2018

           Before Judges Messano and Geiger.

           On appeal from the New Jersey Department of
           Environmental Protection.

           George J. Tyler argued the cause for appellant
           Barry Rosengarten (Tyler & Carmeli, PC,
           attorneys; George J. Tyler, of counsel and on
           the briefs; James Aversano, III, on the
           briefs).

           Mark S. Heinzelmann, Deputy Attorney General,
           argued the cause for respondent New Jersey
           Department    of   Environmental    Protection
           (Gurbir S. Grewal, Attorney General, attorney;
           Melissa H. Raksa, Assistant Attorney General,
           of counsel; Mark S. Heinzelmann, on the
           brief).

PER CURIAM

     Barry Rosengarten entered into a contract to sell certain

property he owned in Perth Amboy to the County of Middlesex (the
County)   for    $5.15   million      (the   contract).       Perth      Amboy   had

previously designated the prior owner of the property, The Landings

at Perth Amboy, LLC, the "redeveloper" of the property under the

Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -73.

Rosengarten,     however,     warranted      in   the   contract    that    he   had

successfully "de-designated" the property and was able to convey

it for use as open space.

     Environmental testing revealed contamination on the property,

and the contract specifically required Rosengarten to remediate

the site, as well as three additional "Areas of Concern" (AOCs)

that were identified during "subsequent investigations."                         The

County escrowed monies to be deducted from the purchase price and

released to Rosengarten for remediation expenses he incurred.                    The

County also agreed to cooperate and assist in securing grants

through   the    Department     of    Environmental     Protection       (DEP)   and

Economic Development Authority (EDA), available from the Hazardous

Discharge Site Remediation Fund (HDSRF), N.J.S.A. 58:10B-4, to

recompense      Rosengarten's        remediation    costs.1        The   contract,

1
  The HDSRF is a "revolving fund" established "in the New Jersey
Economic Development Authority" (EDA) "dedicated for the provision
of financial assistance or grants to municipalities, counties,
redevelopment entities authorized to exercise redevelopment powers
pursuant to [N.J.S.A. 40A:12A-4], and persons, for the purpose of
financing remediation activities at sites at which there is, or
is suspected of being, a discharge of hazardous substances or
hazardous wastes." N.J.S.A. 58:10B-4.

                                         2                                  A-4439-15T2
however, provided that with respect to grant funding, the County

had "no obligation to [Rosengarten] if" the costs were "not

recovered or recoverable."

     Rosengarten's counsel submitted a grant application on the

County's     behalf,     seeking    funding       either     as   a     Brownfield

Development Area Grant, see N.J.S.A. 58:10B-6a(2)(a)(i); N.J.A.C.

19:31-8.3(b)(6), or as a 75 % Recreation and Conservation Grant,

see N.J.S.A. 58:10B-6a(2)(a)(ii); N.J.A.C. 19:31-8.3(b)2).                      DEP

denied the application.

     In his April 28, 2016 letter, DEP's Chief of the Office of

Brownfield     Reuse,     Timothy       Bartle,      noted    Rosengarten       was

responsible for remediating the AOCs and did so.                  Therefore, "it

was unclear" whether the County was eligible for funding.                   Bartle

noted the contract might "demonstrate . . . Rosengarten was hired

by the County to conduct remediation on the County's behalf," but,

despite DEP's request, no one had supplied the contract for review.

     The   record      reveals   that    in   fact   the     contract    had   been

forwarded to someone else in DEP.                 In a subsequent email to

Rosengarten's counsel dated May 26, 2016, Bartle acknowledged his

review of the contract, stating:

           [T]here is no language that would constitute
           a contract between [the] County and . . .
           Rosengarten to conduct remediation services on
           the County's behalf and certainly no language
           about payment to be made to . . . Rosengarten

                                         3                                 A-4439-15T2
          for remediation services. . . .      While my
          office can find the work appropriate and costs
          reasonable, we cannot recommend a grant to EDA
          for past work when the entity applying did not
          do the work nor pay for it. The denial of the
          application submitted by [the] County stands.2

This appeal ensued.

     Rosengarten       contends    DEP     premised    its     decision      on

misinterpretations      of   the    applicable    statutory      provisions,

regulations,    and    the   contract.       Therefore,      denial   of   the

application    was    arbitrary,   capricious    and   unreasonable.       DEP

argues we should dismiss the appeal because the county has not

appealed, and Rosengarten lacks standing to challenge the denial

of the County's application.             Alternatively, DEP contends it

properly denied the application under N.J.S.A. 58:10B-6.

     Initially, we dispense with DEP's argument that Rosengarten

lacks standing and only the County, the grant applicant, could

2
  Rosengarten's notice of appeal seeks review of only the April
28, 2016 letter. We routinely limit our consideration to only the
judgment or order listed in the notice of appeal.         R. 2:5-
1(f)(3)(A); Pressler & Verniero, Current N.J. Court Rules, cmt.
6.1 on R. 2:5-1 (2018) ("[I]t is only the judgments or orders or
parts thereof designated in the notice of appeal which are subject
to the appeal process and review.").       Nevertheless, at oral
argument, Rosengarten clarified the sequence of events, and
respondent DEP has not objected to our consideration of the email
as its statement of reasons for the final agency decision denying
the grant.

                                     4                                A-4439-15T2
appeal its denial.3      We recently addressed a similar argument in

New Jersey Department of Environmental Protection v. Exxon Mobil

Corp., 453 N.J. Super. 272 (App. Div.), certif. denied, 233 N.J.

378 (2018).

      There, we recognized the right of public interest citizens'

groups to intervene on appeal to challenge DEP's settlement of an

action brought under the Spill Act. Id. at 301-03. In particular,

we noted prior decisions that recognized the standing of parties

"affected by a judgment . . . to pursue an appeal if a party with

a similar interest who actively litigated the case in the trial

court has elected not to appeal."          Id. at 297 (quoting CFG Health

Sys., L.L.C. v. Cty. of Essex, 411 N.J. Super. 378, 385 (App. Div.

2010)). We also recognized the right of third parties to challenge

DEP's decisions,       id. at 299-300, if they have "a sufficient

'personal   or    pecuniary    interest    or    property   right   adversely

affected by the judgement.'"         Id. at 301 (quoting State v. A.L.,

440 N.J. Super. 400, 418 (App. Div. 2015)).

      Simply put, the record is clear that the County agreed to use

its   efforts    to   secure   a   grant   to   reimburse   Rosengarten    for

remediation and associated costs.               DEP's denial of the grant

3
  DEP moved to dismiss the appeal on this ground. We denied the
motion without prejudice to DEP's right to reassert the argument
before the merits panel.

                                       5                              A-4439-15T2
directly and adversely affected Rosengarten's pecuniary interests.

Rosengarten has standing, and we consider the merits of his appeal.

      As DEP points out, grants to public entities under the HSDRF

are   governed   by   N.J.S.A.   58:10B-6a(2)(a),       which    provides    in

relevant part:

           Moneys shall be allocated to:

           municipalities, counties, or redevelopment
           entities authorized to exercise redevelopment
           powers pursuant to [N.J.S.A. 40A:12A-4], for:

           (i) projects in brownfield development areas
           pursuant to [N.J.S.A. 58:10B-5],

           (ii) matching grants . . . of up to 75 percent
           of the costs of the remedial action for
           projects involving the redevelopment of
           contaminated property for recreation and
           conservation purposes, provided that the use
           of   the   property    for   recreation    and
           conservation purposes is included in the
           comprehensive plan for the development or
           redevelopment    of   contaminated    property
           . . . .

           [Ibid. (emphasis added).]

Rosengarten acknowledges that under the plain meaning of the

statutory terms, he is not eligible for a grant.

      Instead, Rosengarten argues DEP's cramped interpretation of

the statute when applied to the facts of this case is contrary to

the overarching public purpose of the Brownfield and Contaminated

Site Remediation Act, of which the HDSRF is a part.              See N.J.S.A.

58:10B-4   (stating   purpose    of   fund   is   to   finance   remediation

                                      6                               A-4439-15T2
activities at sites where there is a discharge of hazardous

substances or wastes); see also TAC Assocs. v. N.J. Dept. of Envtl

Prot., 202 N.J. 533, 536-37 (2010) (explaining evolution of site

remediation legislation and legislative history of the HDSRF). 4

He argues that the County met the eligibility requirements to

receive grant monies from the HDSRF pursuant to N.J.S.A. 58:10B-

5(c) and -6(a) (allowing financial assistance to counties who, by

resolution,      "acquire     [(real    property)]      by     voluntary

conveyance . . . for recreation . . . purposes"), and N.J.A.C.

19:31-8.3(e) ("[p]reconditions to eligibility" for public entity

grants).

     Our standard of review of agency action is limited.           In re

Carter, 191 N.J. 474, 482 (2007) (citing Aqua Beach Condo. Ass'n

v. Dep't of Cmty. Affairs, 186 N.J. 5, 15-16 (2006)).                 "An

appellate court affords a 'strong presumption of reasonableness'

to   an    administrative   agency's   exercise   of   its   statutorily

delegated responsibilities."     Lavezzi v. State, 219 N.J. 163, 171

4
 Rosengarten cites to one of our unpublished decisions in support
of this proposition.    Not only are unpublished decisions non-
precedential, see R. 1:36-3, but also the grant at issue in that
appeal was a so-called "innocent party grant," governed by an
entirely different section of the HDSRF, since repealed. L. 2017,
c. 353; see also TAC Assocs., 202 N.J. at 537 (explaining
eligibility for grants made to "persons" under former N.J.S.A.
58:10B-5(d) and -6(a)(4)).

                                   7                             A-4439-15T2
(2014) (quoting City of Newark v. Natural Res. Council, Dep't of

Envtl. Prot., 82 N.J. 530, 539 (1980)).

     An agency decision should not be overturned unless there is

"a showing that it was arbitrary, capricious or unreasonable, or

that it lacked fair support in the evidence."    Carter, 191 N.J.

at 482.

          To determine whether an agency decision "is
          arbitrary, capricious or unreasonable," an
          appellate court must determine

               (1) whether the agency's action
               violates    express    or   implied
               legislative policies, that is, did
               the agency follow the law; (2)
               whether    the    record   contains
               substantial evidence to support the
               findings on which the agency based
               its action; and (3) whether in
               applying the legislative policies
               to the facts, the agency clearly
               erred in reaching a conclusion that
               could not reasonably have been made
               on a showing of the relevant
               factors.

          [Lavezzi, 219 N.J. at 171-72 (quoting In re
          Stallworth, 208 N.J. 182, 194 (2011)).]

     "[O]ur task in statutory interpretation is to discern and

effectuate the Legislature's intent[,]" N.J. Dep't of Envtl. Prot.

v. Huber, 213 N.J. 338, 365 (2013), and we are not "bound by [an]

agency's interpretation of a statute or its determination of a

strictly legal issue."   Norfolk S. Ry. Co. v. Intermodal Props.,

LLC, 215 N.J. 142, 165 (2013)).     Nevertheless, we "defer to an

                                8                          A-4439-15T2
agency's    expertise   and   superior   knowledge   of   a   particular

field[,]" Greenwood v. State Police Training Ctr., 127 N.J. 500,

513 (1992), including its reasonable statutory "construction in

recognition of the agency's expertise."      TAC Assocs., 202 N.J. at

544 (citation omitted).

       We agree with DEP that the County did not qualify for the

public entity grant because it did not perform the remediation

work, incur the costs and expenses associated with the work, or

otherwise designate Rosengarten as a "redeveloper" or as its agent

responsible for remediation.     Under the contract, Rosengarten was

required to remediate the site at his own expense and undertook

that obligation as a precondition to his ability to transfer the

property.     Rosengarten argues his decision to forego potential

residential development of the site resulted in a financial loss,

suggesting DEP should have considered his alleged eleemosynary

motivation.    There is nothing in the statute or its regulations

that suggest those considerations are relevant.

       Moreover, under the regulations, it would appear that the

County was not eligible for a recreation and conservation grant.

N.J.A.C. 19:31-8.3(b)(2) provides public entities are eligible

for:

            Matching grants of up to 75 percent of the
            costs of remedial action on contaminated real
            property to be used for recreation and

                                   9                             A-4439-15T2
              conservation purposes, provided that such use
              is included in the comprehensive plan for the
              development or redevelopment of the real
              property and a permanent restriction regarding
              development and preserving such use is
              recorded and indexed with the deed in the
              registry of deeds for the county in which the
              real property is located.

The record includes evidence that the County long ago adopted a

plan for open space, but there is no evidence that this property

was    part    of    "a     comprehensive      plan   for   the    development      or

redevelopment of the real property" with "a permanent restriction

regarding development and preserving such use."

       We acknowledge that under the regulations, a public entity

may be eligible for a Brownfield Development Area Grant even if

it does not own the property.            N.J.A.C. 19:31-8.3(b)(6).          However,

"[n]o [such] grant shall be awarded unless the public entity has

adopted a comprehensive plan for the development or redevelopment

of    contaminated,         or   potentially    contaminated      real    property."

N.J.A.C.      19:31-8.3(e)(1)(iii).            This   limitation     is    certainly

consistent       with      the   statutory    requirement   that    public    entity

grants     may      only    be    made   to    "municipalities,     counties,       or

redevelopment entities authorized to exercise redevelopment powers

pursuant to [N.J.S.A. 40A:12A-4.]"               N.J.S.A. 58:10B-6a(2)(a).

       Affirmed.

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