Court Opinion

ID: 4430787
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:47:12.058422+00
Date Added: 2024-06-11T14:51:00.227290
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NOT FOR PUBLICATION WITHOUT THE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-1162-16T1

JOHN P. KEEGAN,

        Plaintiff,

v.

TOWN OF KEARNY,

        Defendant/Third-Party
        Plaintiff-Appellant,

v.

NEW JERSEY SPORTS AND EXPOSITION
AUTHORITY (formerly the NEW JERSEY
MEADOWLANDS COMMISSION),

     Third-Party Defendant-Respondent.
________________________________________

              Submitted October 11, 2017 – Decided July 26, 2018

              Before Judges Fuentes, Koblitz and Manahan.

              On appeal from Superior Court of New Jersey,
              Law Division, Hudson County, Docket No. L-
              3330-15.

              Castano Quigley, LLC, attorney for appellant
              (Gregory J. Castano, Jr. on the brief).

              Lowenstein   Sandler,  LLP,  attorney  for
              respondent (James E. Stewart and Rachel K.
              Warren, on the brief).
PER CURIAM

      The Keegan Landfill was an inoperative landfill on land owned

by both the Town of Kearny (Town) and John P. Keegan.             Because the

landfill was left uncapped after it ceased operation, it leaked

heavy metals and pollutants into nearby streams and marshlands.

The New Jersey Sports and Exposition Authority (NJSEA), formerly

the New Jersey Meadowlands Commission, entered into an agreement

with the Town, through which the NJSEA accepted sole financial

responsibility   for     capping   and     remediating   the     landfill    and

marshlands.    The NJSEA also agreed to acquire title to Keegan's

property, remediate his portion of the property, and pursue cost-

recovery actions against him.       In exchange, the NJSEA was granted

the right to operate the landfill for a term of years, retaining

all rights to recoup the cost of remediation.

      The NJSEA fulfilled all of its contractual obligations. It

remediated and capped the landfill, condemned Keegan's property,

and recovered nearly $900,000 from Keegan in a cost-recovery action

under the New Jersey Spill Compensation and Control Act (the Spill

Act), N.J.S.A. 58:10-23.11 to -23.24.             Keegan thereafter filed

suit against the Town seeking contribution.               Because the Town

owned significant portions of the land, Keegan argued it should

bear partial liability for the cost of remediation.              In response,

the   Town   filed   a   third-party       complaint   against    the    NJSEA,

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contending the lease agreement provided that the Town would bear

"no expenses whatsoever" from the remediation plan.

     The NJSEA moved for summary judgment to dismiss the Town's

third-party action seeking contractual indemnification.                    The Town

cross-moved seeking the enforcement of this alleged hold harmless

clause   in   the   lease   agreement       with   respect    to     the   cost    of

remediation.     The matter came for oral argument before Judge Lisa

Rose.    After considering the arguments of counsel, Judge Rose

granted the NJSEA's motion, denied the Town's cross-motion and

dismissed with prejudice the third-party complaint against the

NJSEA.

     In this appeal, the Town argues the motion judge misconstrued

several provisions in the lease agreement that show that the NJSEA

agreed to assume "sole responsibility" for the cost of remediation,

without any financial assistance or contribution from the Town.

Because the Law Division decided this issue as a matter of law,

our review is de novo.       Town of Kearny v. Brandt, 214 N.J. 76, 91

(2013). We will apply the same standards used by the motion judge.

Bhagat v. Bhagat, 217 N.J. 22, 38 (2014).               After reviewing the

competent     evidential    materials       submitted   by    the    parties,      we

conclude there are no genuine issues of material fact in dispute,

and the matter is ripe for summary judgment.                 Ibid.    Viewing the

undisputed material facts in the light most favorable to the Town

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pursuant to Rule 4:46-2(c), we conclude Judge Rose correctly

dismissed the Town's third-party complaint against the NJSEA as a

matter of law.

      After carefully reviewing the record presented by the parties

and   canvassing   the   relevant   case    law   related   to   contractual

indemnification, Judge Rose found that "none of the provisions of

the lease agreement [relied on by the Town] meet the strict

requirements of New Jersey law with respect to indemnification

provisions and contracts."     We agree and affirm.

      This is the second time this court has reviewed a decision

from the Law Division that addressed who should bear the cost of

remediating the Keegan Landfill.         In an unpublished opinion, this

court reviewed the Law Division's decision, made after a bench

trial, that found Keegan was not liable for the cost of remediation

under the Spill Act, or the Sanitary Landfill Facility Closure and

Contingency Act (the Closure Act), N.J.S.A. 13:1E-100 to -227.

N.J. Meadowlands Comm'n v. Keegan, No. A-6090-10 (App. Div. 2013)

(slip op. at 2).    Both parties appealed, challenging "the rulings

on liability favorable to the other, and both contend[ed] the

court erred in fixing Keegan's share of the costs."              Ibid.

      This court concluded Keegan was liable under the Closure Act,

reversed the judgment of the trial court, and remanded the matter

for reconsideration of damages.          This court explained:

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          Because the evidence establishes that Keegan
          acquired the property knowing it was a former
          landfill from his father, was involved albeit
          tangentially in its operation, had reason to
          know its improper closure presented the
          potential environmental problems, and held the
          property for speculation for several decades,
          we conclude that the court erred in finding
          he was not liable under the Closure Act.
          Accordingly, we remand for reconsideration of
          the costs that the court disallowed in
          fashioning an award designed to do nothing
          more than avoid unjust enrichment.

          [Id. at 3-4.]

In reaching this conclusion, this court reviewed the lengthy

history of the Keegan Landfill and its environmental impact.       In

lieu of restating this history, we incorporate it by reference

here.   Id. at 4 to 16.

     On June 14, 2005, the Town agreed to lease the landfill to

the NJSEA for a ten-year term commencing on June 15, 2005 and

ending December 15, 2015.   The lease contains eleven unnumbered

prefatory or "WHEREAS" clauses.   The Town focuses on the following

prefatory clause as evidence of the parties' intent and expectation

as to who would bear the cost of remediation:

          WHEREAS, as part of this project the [NJSEA][1]
          will assume sole responsibility, without
          financial assistance or contribution from
          Kearny, for the design and implementation of
          a closure plan approved by the Department of
          Environmental Protection ("DEP")[.]

1
  As noted earlier, the lease agreement was signed by the Town and
the NJSEA's predecessor, the New Jersey Meadowlands Commission.

                                  5                         A-1162-16T1
     The lease agreement contained thirty numbered and titled

sections, many of which were further subdivided into multiple

subsections.   Section 4 is titled "Other Property Interests."

Subsection 4A states, in relevant part, that the NJSEA "shall be

responsible, at its sole cost and expense, for acquiring and

terminating any leasehold in the Demised Premises . . . held by

Hudson Meadowlands Urban Renewal Development Corporation . . . ."

     Subsection 4B states, in relevant part:

          The [NJSEA] shall also be responsible, at its
          sole cost and expense, for acquiring fee
          simple title to and any other interests in
          property necessary for it to conduct Disposal
          Operations and provide for the closure of
          portions of the Keegan Landfill that are not
          under    the   ownership    of   the    Town.
          Specifically, the [NJSEA] shall acquire that
          . . . which shall include . . . the property
          believed to be owned by John Keegan, Esq.
          . . . consisting of 3.342 acres, more or less
          ("the Retained Properties") . . . .

     Finally, section 11, titled "No Cost to Town," states:

          It is the intention of the parties that the
          Town shall have no expenses whatsoever with
          respect to the Demised Premises or the
          Retained Premises during the Lease term and
          the [NJSEA] agrees that it will provide, at
          its sole cost and expense, for the closure of
          the Keegan Landfill. During the Lease term,
          the Rent and Host Community Payments shall be
          absolutely "net" to the Town.

     These three sections of the lease agreement are the core

facts the Town cites to support its argument that the NJSEA agreed

                                6                          A-1162-16T1
to   indemnify   it   against   any   claims   related    to   the    cost    of

remediating the Keegan Landfill.          Judge Rose found none of these

sections supported the Town's argument.         Judge Rose observed that

none of these lease provisions relied on by the Town used the term

"indemnity," which she noted was a term of contract law that

requires unambiguous language to ensure there is mutual assent.

      Citing Kutzin v. Pirnie, 124 N.J. 500, 507 (1991), Judge Rose

emphasized that "the governing language" of a contract should be

unambiguous, clear, and leave no doubt as to its meaning.                    The

absence of any reference to "indemnity" in the lease is a material

factor that undercuts the Town's argument because "indemnification

agreements are interpreted in accordance with the rules governing

contracts   generally,    ambiguous       clauses    should    be    construed

strictly against the indemnitee."          Mantilla v. Nc Mall Assocs.,

167 N.J. 262, 269 (2001) (quoting          E.I. duPont deNemours & Cent.

Motor Parts Corp. v. E.I. duPont deNemours & Co., 251 N.J. Super.

5, 13 (App. Div. 1991)).2

      The NJSEA also argued against the Town's claims based on

"common law and statutory contribution."            In rejecting the Town's

2
 Judge Rose also addressed and rejected the Town's argument based
on "implied indemnification." Because the Town has not made this
argument in this appeal, we will not address it. See Mid-Atlantic
Solar Energy Indus. Ass'n v. Christie, 418 N.J. Super. 499, 508
(App. Div. 2011); see also R. 2:6-2(a)(5).

                                      7                                A-1162-16T1
claims based on these two theories of liability, Judge Rose noted

that "Kearny did not . . . set forth any opposition with respect

to [these] . . . contribution claims."   She then held:

          In order for a claim of contribution to
          succeed, whether common law or statutory, the
          person from whom contribution is sought, must
          be   at  least   partially   liable  to   the
          plaintiff[.]

                 . . . .

          Here, Kearny's common law and statutory claims
          for contribution fail for the same reason that
          its claims for implied indemnification failed.
          That is, [the] NJSEA cannot be responsible for
          the contamination of the subject property
          because the contamination at issue occurred
          long before NJSEA entered into the lease
          agreement with Kearny.

     We agree.     In this appeal, the Town has not cited any

authority to rebut Judge Rose's unassailable conclusion based on

this settled principle of law.   We thus affirm substantially for

the reasons expressed by Judge Rose in her oral decision delivered

from the bench on September 16, 2016.

     Affirmed.

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