Court Opinion

ID: 5684228
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:07:08.989125+00
Date Added: 2024-06-11T08:39:58.774807
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NOT FOR PUBLICATION WITHOUT THE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-4360-19

SUNWAY EQUITY, LLC, a
Limited Liability Company
organized and existing under the
laws of the State of New Jersey,
GLENN T. WERTHEIM, and
GAIL WERTHEIM,

          Plaintiffs-Appellants,

v.

SUBURBAN PROPANE, LP,
a Delaware Limited Partnership,
SOVEREIGN CONSULTING, INC.,
and BROCKERHOFF
ENVIRONMENTAL SERVICES,
LLC,

          Defendants,

and

JM SORGE, INC.,

     Defendant-Respondent.
______________________________

                   Argued November 15, 2021 – Decided January 12, 2022
            Before Judges Sumners and Vernoia.

            On appeal from the Superior Court of New Jersey, Law
            Division, Somerset County, Docket No. L-0458-17.

            Glen J. Vida argued for appellants.

            Patrick J. McCormick argued for respondent (Hardin,
            Kundla, McKeon & Poletto, attorneys; Patrick J.
            McCormick and Jenna K. Clemente, on the brief).

PER CURIAM

      In this action arising from the environmental remediation of commercial

property (the property) by defendant JM Sorge, Inc. (JMS), plaintiffs Sunway

Equity, LLC (Sunway), Glenn T. Wertheim, and Gail Wertheim, who purchased

the property from defendant Suburban Propane, LP (Suburban) about nine years

after remediation was deemed completed, appeal the summary judgment

dismissal of their complaint against JMS. We affirm the dismissal because: (1)

the action was barred by the statute of limitations; and (2) if the action was not

time-barred, JMS did not owe a duty to plaintiffs relative to its remediation of

the property.

                                        I.

      As this is an appeal from summary judgment granted to defendant, our

recitation of the facts is derived from the evidence submitted by the parties in

support of, and in opposition to, the summary judgment motion, viewed in the

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light most favorable to plaintiffs, and giving them the benefit of all favorable

inferences. Angland v. Mountain Creek Resort, Inc., 213 N.J. 573, 577 (2013).

                                        A.

                                  Remediation

      In 1991, Suburban retained JMS to remove three underground storage

tanks containing gasoline, diesel, and waste oil, from its 1.7-acre property in

Bridgewater Township. After the New Jersey Department of Environmental

Protection (DEP) approved JMS's Underground Storage Tank Closure Plan on

January 30, remediation work began on February 19. In August, JMS produced

a Site Assessment Report detailing its work and investigations at the site.

      After five years of JMS's remediation work, the DEP issued a May 20,

1996 letter to Suburban, stating, "no further action [was] required for the soils

associated with" the "three separate Areas of Concern" where the tanks were

previously located, but that additional groundwater testing for volatile organic

compounds (VOC) contaminates was still necessary. On January 20, 1997, JMS

submitted a Supplemental Investigation Report/Remedial Action Workplan to

DEP that it prepared for Suburban. The report "confirmed that the subsurface

soils" near the diesel tank excavation were contaminated with VOCs, which

"appear[ed] to be the result of surficial discharges of gasoline and is not related

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to the former operation of" the diesel tank. JMS "propos[ed] to remediate this

relatively limited area of contaminated soil using standard excavation and

removal techniques[,]" and then install a replacement monitoring well in the area

"to assess the positive impacts of the proposed soil remediation efforts on local

groundwater quality."      The tank locations excavated covered a total of

approximately 736 square feet, roughly one percent of the 1.7 acre, or 74,052

square feet, of the property.

      In a July 24, 1997 letter to DEP, which was copied to Suburban, JMS

reported it conducted "relatively small . . . excavation[s]" and soil tests "from

around the outer perimeter of each excavation[,]" which revealed benzene, a

VOC, at concentrations above DEP cleanup criteria, but "[n]o other

[contaminants] were detected exceeding" the criteria.

      Approximately ten months later, on April 8, 1998, JMS submitted a "Final

Remedial Action Report [] and Classification Exception Area [(CEA)]Proposal"

to the DEP. Referring to its supplemental investigation in 1996, JMS "proposed

to remediate [a] relatively limited area of contaminated soil" and conduct

additional groundwater sampling.       Groundwater samples taken from the

monitoring well adjacent to the former diesel tank excavation area showed a

further decrease in the concentration of benzene, though still in excess of DEP

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groundwater quality standards, and that neither of the other two wells "exhibited

levels of groundwater contamination . . . consistently above" DEP standards.

      On May 12, DEP issued Suburban a "NO FURTHER ACTION [(NFA)]

Letter and COVENANT NOT TO SUE" where it "acknowledg[ed] the

completion of a Remedial Investigation and Remedial Action pursuant to the

Technical Requirements for Site Remediation (N.J.A.C. 7:26E)[,] for the former

diesel fuel oil, gasoline[,] and waste oil underground storage tank Areas of

Concern and no other areas." The NFA letter acknowledged that DEP "relied

upon the certified representations and information provided to" it and that its

determination was conditioned on Suburban Propane having not "withh[e]ld any

information from" the DEP. The NFA letter imposed a CEA and well restricted

area on the property, suspending the use of groundwater within the area for

fourteen years or until Suburban demonstrated that benzene contamination no

longer exceeded groundwater quality standards.          Standards for all other

substances remained in effect within the CEA. Suburban and its successors were

also required to "conduct monitoring for compliance and effectiveness of [this]

institutional control . . . and submit a certification to the [DEP] every two years

in writing that the institutional control [was] being properly maintained."

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                                      B.

                                 Property Sale

      On February 8, 2000, Glenn,1 who owned a lot adjacent to the property

since August 1985, entered into a written contract (the contract) with Suburban

to purchase the property "as is" for $285,000. According to the contract's

paragraph six, Suburban "disclosed all known and suspected environmental

conditions that may impact the [property], including but not limited to those

conditions set forth in the January 1991 'Proposed Tank Closure Plan,'" and the

1991 "Site Assessment Summary Report" prepared by JMS and in the NFA

letter, "as well as unconfirmed conditions set forth in verbal communications

concerning possible burial of propane tanks and/or cylinders on the [property]."

The paragraph also reflected that Glenn "agree[d] to assume and accept all

obligations and responsibilities for said known and suspected environmental

conditions."

      In paragraph eight, Glenn was afforded the right to conduct

"investigations, engineering tests, test borings, percolation and other soil and

ground water tests, and any other tests as may be necessary to determine [the

1
  Because Glenn and Gail Wertheim have the same surname, we refer to them
by their first names to avoid confusion. We mean no disrespect.
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property's] physical conditions which, in [his] sole discretion, will interfere with

or prevent the transfer or use of the [property] for [which he] desired." It also

gave him the right to terminate the contract if he "reasonably determine[d] that

the physical condition of the [property was] in any way contaminated with any

hazardous substance."

          Under paragraph five, Glenn, "as of the [c]losing [d]ate," expressly

waived all claims regarding the conditions of the "water, soil and geology[,]" or

"any hazardous materials in, at, on, under or related to the [property]," unless he

terminated the contract in accordance with his investigation and study of the

property. Yet, the contract warned of "unconfirmed conditions set forth in

verbal communications concerning possible burial of propane tanks and/or

cylinders on the [property]" in addition to the "conditions set forth in the" 1991

reports (Underground Storage Tank Closure Plan and Site Assessment) and NFA

letter.

          Before the property's closing, Suburban provided plaintiffs with copies of

the 1991 reports it received from JMS. Glenn received no other documentation

from Suburban, thus plaintiffs asserted in discovery that their knowledge of

known or suspected environmental conditions on the property "was limited

to . . . the two 1991 reports and the NFA" letter. Significantly, he did not

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exercise his right to have the property investigated or studied for environmental

issues.   Nor did he contact anyone at JMS prior to closing regarding its

remediation work on the property, despite knowing JMS's owner "for a number

of years" and having worked with him in the past.

      Three days prior to the property's closing on April 11, 2000, the contract

was amended to reflect that the property will be deeded to Gail, not Glenn.

Plaintiffs said this was done "to avoid a premature merger of estates with the

adjoining lot" Glenn owned.

                                       C.

      Property Conveyance to Sunway Equity/Contamination Discovery

      Over ten years after the property was deeded to Gail, she conveyed it to

Sunway Equity, which she and Glenn solely owned, on September 20, 2010.

Within two days, the adjacent lot Glenn owned was consolidated with the

property, and plaintiffs executed a land lease agreement with Wawa, Inc. for the

property. At the time, the property was leased to Somerset Hills Towing for its

offices and parking. That lease ceased in May 2015, and the property was turned

over to Wawa for its development.

      In February 2016, Wawa discovered the property was contaminated with

various hazardous substances, including substantial quantities of arsenic.

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Excavation work also found extensive steel piping in the soil near the former

diesel tank excavation.

                                        D.

                                     Litigation

        In April 2017, plaintiffs sued Suburban, JMS, Sovereign Consulting Inc.

(Sovereign), and Brockerhoff Environmental Services, LLC (Brockerhoff).

JMS was sued for negligence and violation of New Jersey Spill Compensation

and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24. Only claims against

JMS are relevant to this appeal. 2

        On November 29, the trial court granted JMS's summary judgment as to

the Spill Act claims 3 but denied the motion without prejudice as to the

negligence claim, to permit additional discovery.

        On January 31, 2020, following the end of discovery, JMS refiled its

motion for summary judgment to dismiss the negligence claim. On April 20,

the court issued an order and oral decision granting summary judgment to JMS,

2
    Plaintiffs' claims against other defendants were dismissed as follows:
Suburban – negligence, breach of contract, and equitable fraud claims were
dismissed with prejudice but claims under the Spill Act were dismissed without
prejudice; Brockerhoff – all claims were voluntarily dismissed without
prejudice; and Sovereign – all claims were voluntarily dismissed with prejudice.
3
    The dismissal of these claims is not being appealed.
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holding plaintiffs' negligence claim was barred by the statute of limitations and

JMS did not owe a duty to plaintiffs.

                                        II.

      Plaintiffs appeal the April 20 summary judgment order, arguing:

            POINT I

            [JMS] HAD A DUTY TO PLAINTIFF[S].

            POINT II

            THE PLAINTIFF[S] HA[VE] A VIABLE ACTION
            AGAINST [JMS] FOR NEGLIGENCE.

            POINT III

            PLAINTIFF[S'] ACTION IS NOT TIME BARRED.

      We review the trial court's decision on a summary judgment motion de

novo. Giannakopoulos v. Mid State Mall, 438 N.J. Super. 595, 599 (App. Div.

2014). We utilize the same standard as the court and consider "whether the

competent evidential materials presented, when viewed in the light most

favorable to the non-moving party, are sufficient to permit a rational factfinder

to resolve the alleged disputed issue in favor of the non-moving party." Brill v.

Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

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                                        10
                                       A.

      Initially, we address plaintiffs' challenge to the summary judgment

dismissal of their negligence claim because it is time-barred. They do not

dispute that the six-year statute of limitations under N.J.S.A. 2A:14-1 applies to

their claim.   Rather, they argue their cause of action did not accrue until

February 2016, when Wawa discovered the property was contaminated, because

JMS's negligence was "camouflaged by the NFA letter, the CEA[,] and the

incomplete set of documents submitted by Suburban[,]" which "together

concealed the [contamination] from" them. We are unpersuaded.

      The running of the statute of limitations begins when the plaintiff is aware

"through the exercise of reasonable diligence, the facts that form the basis for

an actionable claim against an identifiable defendant." The Palisades at Ft. Lee

Condo. Ass'n, Inc. v. 100 Old Palisade, LLC, 230 N.J. 427, 435 (2017) (citing

Caravaggio v. D'Agostini, 166 N.J. 237, 246 (2001)). "[T]he burden [is] on the

plaintiff seeking application of the discovery rule to show that a reasonable

person in her [or his] circumstances would not have been aware, within the

prescribed statutory period, that she [or he] had been injured by [the]

defendant[']s" conduct. Kendall v. Hoffman-La Roche, Inc., 209 N.J. 173, 197-

98 (2012). "The discovery rule is essentially a rule of equity," taking into

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consideration fairness to the plaintiff and the defendant. Lopez v. Swyer, 62

N.J. 267, 273 (1973). A hearing is necessary when there is a factual dispute

concerning the date of the discovery. J.P. v. Smith, 444 N.J. Super. 507, 528

(App. Div. 2016). The trial court's determination of "whether a cause of action

is barred by a statute of limitations is a question of law that we review de novo."

Save Camden Pub. Schs. v. Camden City Bd. of Educ., 454 N.J. Super. 478, 487

(App. Div. 2018) (citing Catena v. Raytheon Co., 447 N.J. Super. 43, 52 (App.

Div. 2016)).

      We reject plaintiffs' contention that the tolling of the statute of limitations

started in February 2016, when Wawa's investigation uncovered contaminants

in the property. The clock began on April 11, 2000, when Gail took ownership

of the property and plaintiffs reasonably could have known of its contamination

had they exercised due diligence.       The contract to buy the property from

Suburban put plaintiffs on notice that it had preexisting environmental issues.

The 1991 Site Assessment Report and the NFA letter given to Glenn by

Suburban did not represent that the entire property was examined and found to

be uncontaminated. The documents clearly stated that JMS's remediation plan

was limited to the removal and clean-up associated with the three underground

tanks––covering one percent of the property's total area—and nothing else. JMS

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did not withhold any information relevant to its work which hampered plaintiffs'

ability to determine whether the property was contaminated. Any deficiency of

the documentation provided to plaintiffs did not affect the running of the statute

of limitations; it was their failure to exercise due diligence by not asking for the

documentation they now claim Suburban did not provide.

      The contract permitted Glenn to obtain all JMS and DEP records pertinent

to JMS's remediation in Suburban possession, to have the property

professionally investigated, and to terminate the contract without liability if

harzardous conditions were found on the property. There is no equitable basis

to toll the six-year statute of limitations period until February 2016, almost

sixteen years after Gail took ownership of the property in April 2000. Simply

put, plaintiffs' conduct was unreasonable by failing to exercise contractual rights

to obtain all the property's pertinent environmental records and conduct an

investigation regarding the property's environmental condition.

      We see no merit in plaintiffs' argument that the court erred in not

conducting a plenary hearing regarding the discovery of the property's

contamination. There was no factual dispute as to their lack of due diligence in

uncovering the property's contamination before they acquired the property.

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Plaintiffs do not identify any specific material disputed fact or reasonable

inference denied to them that alters our reasoning.

      Having concluded the statute of limitations commenced on April 11, 2000,

plaintiffs had six years thereafter to file suit against JMS. They did not do so

until April 2017, which was too late.       Hence, the court properly granted

summary judgment dismissal of plaintiffs' complaint as time-barred.

                                       B.

      Although we have concluded plaintiffs' negligence claim was properly

dismissed as being time-barred, for the sake of completeness, we also address

the court's finding that the claim should also be dismissed because JMS owed

no duty to plaintiffs with respect to its remediation work at the property.

Plaintiffs argue it was reasonably foreseeable buyers of the property would rely

on the NFA letter and the 1991 reports in deciding to purchase the property, and

therefore, if JMS's reports were "negligently generated, incomplete[,] and

misleading," injury to them as subsequent buyers of the property was also

reasonably foreseeable. They maintain that failing to impose a duty on JMS

here would mean that "[a]ll prior investigations would have to be repeated with

each succeeding transaction[,]" imposing a considerable economic burden on

the sale of real estate. They also argue that it would "curtail the reliance by

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subsequent hydrogeologists and [licensed site remediation professionals

(LSRPs)] upon the existing database at the DEP[,]" which in turn would make

"environmental compliance . . . chaos." We do not favor these arguments.

      In a negligence action, a plaintiff has the burden to prove a defendant

owed him or her a duty of care that was breached, which was the proximate

cause of injury. D'Alessandro v. Hartzel, 422 N.J. Super. 575, 579 (App. Div.

2011). Whether a duty exists is a matter of law decided by the court, not the

factfinder. Siddens v. Cook, 382 N.J. Super. 1, 8 (App. Div. 2005) (citing

Rogers v. Bree, 329 N.J. Super. 197, 201 (App. Div. 2000)).              Similar to

application of the above noted statute of limitations discovery rule, whether a

duty of care exists is a question "of fairness and policy that implicates many

factors." Carvalho v. Toll Bros. & Devs., 143 N.J. 565, 572 (1996). "The

foreseeability of harm is a significant consideration in the determination of a

duty to exercise reasonable care." Ibid. However, the foreseeability of "injury

to a potential plaintiff does not in itself establish the existence of a duty." Ibid.

(quoting Carter Lincoln-Mercury, Inc. v. EMAR Grp., Inc., 135 N.J. 182, 194

(1994)).

      "Once the foreseeability of an injured party is established, . . .

considerations of fairness and policy govern whether the imposition of a duty is

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warranted." Id. at 573 (alteration in original) (quoting Carter Lincoln-Mercury,

Inc., 135 N.J. at 194-95). In considering the fairness and policy implications of

imposing a duty, courts identify, weigh, and balance four factors:            "the

relationship of the parties, the nature of the attendant risk, the opportunity and

ability to exercise care, and the public interest in the proposed solution." Ibid.

(quoting Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993)).

"[W]hereas the foreseeability inquiry is rooted in the specific facts of a

particular case, the fairness and policy inquiry focuses on the ability to derive

from those facts a general rule that can 'sensibly, predictably, and fairly govern

future conduct.'" Coleman v. Martinez, 247 N.J. 319, 342-43 (2021) (quoting

Est. of Desir ex rel. Estiverne v. Vertus, 214 N.J. 303, 330 (2013)).

      Even where a person did not hire a professional, a duty of care may be

imposed on an injured third party who reasonably and foreseeably "relied upon

the representation of the professional." Rezem Fam. Assocs., LP v. Borough of

Millstone, 423 N.J. Super. 103, 121 (App. Div. 2011) (quoting Zielinski v. Pro.

Appraisal Assocs., 326 N.J. Super. 219, 226 (App. Div. 1999)). Thus, in Petrillo

v. Bachenberg, 139 N.J. 472, 486-89 (1995), the Court held the attorney of a

seller of real estate owed a duty of care to the buyer for a misleading report of

percolation tests produced by the attorney which did not fully detail the number

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of failed percolation tests that the attorney knew or should have known the buyer

would rely upon on in purchasing the property. However, for different reasons,

we held in Zielinski, it was unfair to impose a duty of care upon an appraiser to

the buyer of a property where the appraisal was for the lender and not seen by

the buyer, because it was not an opinion of the property's condition to be

reasonably relied upon by the buyer regarding the property's defects. 326 N.J.

Super. at 224-26. Moreover, the appraisal contained a "disclaimer regarding

structural and engineering defects." Ibid. at 227.

      Plaintiffs never saw the 1998 report on which DEP expressly relied upon

in issuing the NFA letter. It was unreasonable for them to solely rely on the

NFA letter to not conduct their own environmental investigation of the property

when the letter expressly applied only to the "underground storage tank Areas

of Concern." Prior to the property's closing, they did not obtain or ask for the

attachments to the 1991 site assessment report, which Suburban provided them.

Had they done so, they would have been aware of the arsenic finding and

disposal of hazardous soil that were mentioned in those attachments. JMS was

not responsible for them not receiving all its remediation-related reports.

Nevertheless, based on the documentation plaintiffs received prior to closing,

they knew JMS's limited remediation was successful, but they still should have

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reasonably concluded it was necessary to retain an environmental consultant to

investigate the property's condition.

      Unlike the attorney in Petrillo, JMS's opportunity to exercise care to avoid

reliance on their work product was limited. Nothing here suggests that JMS was

responsible for plaintiffs not receiving all of JMS's reports, as was the situation

in Petrillo. JMS's duty stopped was limited to sending all of its reports and

correspondence to Suburban. And while the attorney in Petrillo "should have

foreseen that [the plaintiff] would rely on the total number of percolation tests"

reflected in the composite report he submitted to the broker, 139 N.J. at 487,

JMS could not have foreseen reliance on any particular combination of

incomplete documents that Suburban decided to submit to a buyer, or on the

resulting nondisclosure of facts that JMS disclosed to Suburban and DEP .

      Furthermore, there is no fairness or policy interest in imposing a duty of

care on JMS. Finding a duty would unreasonably disregard any reliance on

documented remedial actions and NFA letters.          A buyer who purchases a

property with a known history of contamination "as is" and without any

independent investigation, in reliance on a facially incomplete record of

remediation and an NFA letter that applies only to a portion of a property, does

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so at his or her own risk. As this describes plaintiffs' conduct, they should not

be able to pursue negligence claims against JMS.

      Although the dismissal of plaintiffs' Spill Act claims are not being

appealed, the act is relevant to evaluating the fairness or policy interest. It

provides the owner of a contaminated property can avail themselves of an

"innocent purchaser" defense and avoid liability for cleanup and removal costs

by showing that: (1) "the person acquired the real property after the discharge"

occurred; (2) "at the time the person acquired the real property, the person did

not know and had no reason to know that any hazardous substance had been

discharged at the real property"; (3) "the person did not discharge the hazardous

substance [and] is not in any way responsible for the hazardous substance"; and

(4) "the person gave notice of the discharge to [DEP] upon actual discovery of

that discharge." N.J.S.A. 58:10-23.11g(d)(2). "To establish that a person had

no reason to know that any hazardous substance has been discharged . . . the

person must have undertaken, at the time of acquisition, all appropriate inquiry

into the previous ownership and uses of the property[,]" which in turn requires

"the performance of a preliminary assessment, and site investigation, if the

preliminary assessment indicates that a site investigation is necessary." Ibid.

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      Because plaintiffs did not conduct their own environmental assessment of

the property, they cannot claim they were innocent purchasers under the Spill

Act, nor can they seek invocation of comparative negligence to avoid summary

judgment. Consequently, there is no fairness or policy reason to impose any

duty on JMS, which remediated the property and obtained an NFA letter in

accordance with its duty to Suburban, with respect to plaintiffs.

      To the extent we have not addressed any remaining issues, we find they

lack sufficient merit to warrant discussion in a written opinion.    R. 2:11-

3(e)(1)(E).

      Affirmed.

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