PER CURIAM.
This matter returns to us following a remand by the Supreme Court,
Control Act (Spill Act),
The Supreme Court reversed, holding that the six-year statute of limitations does not apply to private claims for contribution made pursuant to the Spill Act, and that the motion judge erred in concluding that plaintiff's Spill Act claims against certain defendants were time-barred.
We provide a brief summary of the facts of this case from the Court's opinion.
Cleaners, a dry cleaning business owned at the time by Robert Herring (Herring). Herring and his wife had entered into a lease with the property's previous owner, Morris Center Associates, in 1976. Due to construction, Herring was unable to occupy and operate Plaza Cleaners until approximately January 1, 1978. At some point before the move-in date, Herring installed a steam boiler in a room at the rear of the leased space and an underground storage tank (UST) beneath the concrete floor of that room; the UST held fuel oil needed to operate the boiler. The boiler and UST were installed to generate the heat and steam required for the dry cleaning process. Fill and vent lines for the UST protruded through an exterior wall of the building into an alleyway.
In 1985, Herring sold Plaza Cleaners to defendants Edward and Amy Hsi (collectively the Hsis). The Hsis owned the business until 1998 when it was sold to current owner and third-party defendant, Byung Lee (Lee). The original boiler remained in operation from the time the business opened in 1978 until approximately November 2003; Lee later replaced it with a natural-gas-fired boiler.
In 1993, as part of a proposed refinancing, plaintiff hired Giorgio Engineering, P.C., to perform an environmental audit of the Morristown Plaza property. Giorgio Engineering incorrectly reported that there were no USTs on the site. In 1999, an UST that served a ShopRite grocery store in Morristown Plaza leaked. It was removed under the supervision of Morristown Plaza's then property manager, Ekstein Asset Management. Although Ekstein Asset Management and the Department of Environmental Protection (DEP) entered into a memorandum of agreement in respect of that incident, Ekstein Asset Management failed to comply with DEP's remedial process; notwithstanding, DEP terminated the memorandum of agreement on November 1, 2000.
Importantly, in August 2003, a monitoring of a well installed near Plaza Cleaners's UST revealed fuel oil contamination. Plaintiff was informed that the UST used by Plaza Cleaners might be the source. A subsequent investigation revealed that although the UST was intact, the fill and vent pipes were "severely deteriorated, with large holes along a significant portion of their lengths." Plaintiff's experts concluded that those holes had developed as early as 1988 and, since that time, oil had been leaking from the pipes each time the tank was filled. Each of the named oil company defendants allegedly supplied fuel oil to Plaza Cleaners at various times between 1988 and 2003. Those companies delivered varying quantities of oil on a more or less monthly basis, filling the UST from tanker trucks by means of the fill pipe located in the alley wall.
Plaintiff took steps to remediate and clean up the contamination and pursued a contribution claim against other allegedly responsible parties. In its action, plaintiff contends that, before 2003, it was unaware that any UST existed on the property.
On July 31, 2006, plaintiff filed an initial three-count complaint naming as a defendant Grant Oil Company (Grant Oil). Count one of the complaint asserted a claim under the Spill Act . . . seeking contribution for costs related to the cleanup and removal of the fuel oil.
Between October 2007 and July 2009, plaintiff filed three amended complaints, adding as defendants the Hsis and other heating oil companies—Able Energy, Parsippany Fuel Oil Company (Parsippany Fuel), Petro Incorporated (Petro), Johnson Oil Company (Johnson Oil), Meenan Oil Company (Meenan Oil) doing business as Region Oil Company (Region Oil) as successor in interest to Johnson Oil, and Spartan Oil Company (Spartan Oil). The heating oil companies filed answers, third-party complaints, cross-claims, and counter-claims. Lee and Multi Cleaners, Inc., doing business as Plaza Cleaners, were brought into the action as third-party defendants.
Meanwhile, the parties engaged in extensive discovery. In response to a series of motions, the trial court entered orders barring proposed testimony by Robert Walters, plaintiff's oil delivery expert, and granting summary judgment in favor of defendants on various claims against them. In particular, in respect of the summary judgment motions, the trial court held that the general six-year statute of limitations for injury to real property . . . applied to private claims for contribution pursuant to the Spill Act and, as such, claims against defendants for damage that had occurred more than six years before that defendant was brought into the case were time-barred. Further, after conducting a hearing pursuant to
[220
The unaddressed issues which now must be resolved are:
The motion judge ruled that Spill Act liability requires notice of a discharge to defendants:
The judge did not rule on whether any of the defendants had notice because he barred plaintiff's claim by applying the statute of limitations.
We begin by noting that there is no specific notice requirement in the Spill Act. The Court in
The Court held that to obtain damages under the Spill Act, there must be proof by a preponderance of the evidence of a reasonable connection between the discharge, the discharger, and the contamination at the damaged site.
Consistent with the holding in
When viewed in the light most favorable to plaintiff, there was sufficient evidence to create a genuine issue of material fact concerning defendants' connection to the contamination. Whether Morristown has established a nexus between each defendant and the environmental damage by a preponderance of the evidence is an issue that must be determined at trial.
Plaintiff contends that defendants are liable under both of the Spill Act liability provisions, as a "discharger" and as "a person in any way responsible for any hazardous substance." Defendants maintain that they are neither.
The Spill Act defines a discharge as:
In this case, viewing the evidence in the light most favorable to plaintiff, any defendant who is shown to have delivered fuel oil into a leaking UST system, released a hazardous substance into the ground and could meet the statutory definition of a discharger. Additionally, if a defendant owned or operated a vehicle from which a discharge occurred, they could be a "person responsible for a discharge."
At trial, plaintiff must establish a nexus between each defendant and the fuel-oil contamination. Plaintiff need not, however, prove that defendants had triggering notice that the fill line was leaking.
Plaintiff retained Robert Walters to provide an opinion on the deficiencies of the fuel oil practices of the defendant delivery companies. Walters concluded that the delivery defendants failed to follow certain practices.
After conducting a
Addressing Walters's experience, the judge concluded that "Walters was not candidly familiar with the actual industry of retail oil delivery," and instead his experience focused on large scale storage and movement of oil. The judge concluded that Walters "had little or no experience in the retail oil delivery business, per se," and did not address in his opinion under what circumstances a test for the integrity of the tank would have to be produced or how often tanks should be tested.
Walters was unaware of protocols that delivery companies should follow when presented with conflicting information about tank size. Walters based his opinion, at least in part, on certain manuals, including ones from the National Oilheat Research Alliance, which were not in effect during the time that the deliveries were made. Walters also admitted that his personal opinions are not based on a consensus of other experts' opinions and that he performed no study or test to support his personal opinions.
The motion judge concluded that to the extent that there are events that put the delivery companies on notice that are not barred by the statute of limitations, the jury did not need and should not be subjected to the ad hoc opinions of Walters as to what he personally believes are the best practices or proper procedures to be followed by delivery companies. The judge found there was not a sufficient foundation for Walters's opinion in industry customs, standards, rules, regulations, and practices. Moreover, Walters could not state that his opinion was given within a reasonable degree of certainty of industry practices, standards, or professional judgment because the opinion is his judgment alone.
The judge concluded: "While [Walter's] testimony clearly was based upon his work experience, and he was familiar with industry practices, the substance of his opinion is not founded upon industry practices. And while I respect his overall credentials, the substance of his opinion will be deemed inadmissible. . . ."
Our review of a trial court's evidential ruling is limited to examining the decision for abuse of discretion.
The rule requires that, "(1) the intended testimony must concern a subject matter that is beyond the ken of the average juror; (2) the field testified to must be at a state of the art such that an expert's testimony could be sufficiently reliable; and (3) the witness must have sufficient expertise to offer the intended testimony."
As to the first prerequisite, the motion judge found that the jury "does not need or should not be subjected to the ad hoc opinions of Mr. Walters as to what he personally believes to be best practices or proper procedures to be followed by oil companies without a sufficient foundation in industry customs, standards, rules, regulations, practices or the like."
Walters's opinion was not based on expertise in the applicable area. He offered his own opinion as to deliveries without support from authorities or any applicable regulations or manuals. He conceded that what he proposed was not an industry standard or custom. He had no experience in the delivery of oil to retail or residential establishments.
Two recent Supreme Court opinions addressing the net opinion rule support the motion judge's decision. In
The Court explained that the rule "mandates that experts `be able to identify the factual bases for their conclusions, explain their methodology, and demonstrate that both the factual bases and the methodology are reliable.'"
Div.),
In
We are satisfied that the judge's decision was consistent with the principles set forth in
Plaintiff claims that the trial judge made a determination concerning the equitable allocation of liability of the remaining defendants, Parsippany Fuel, Able Energy, and Grant Oil, which is contrary to the joint and several liability mandated by the Spill Act,
Clearly, the judge was not apportioning liability, he was explaining which claims were still viable and which were dismissed due to the statute of limitations. As the judge's decision on the statute of limitations has been reversed, this portion of his ruling is moot.
Moreover, most of the arguments that defendants raise on appeal in attempting to avoid liability can properly be made to the trial court and considered if and when liability is allocated.
On their cross-appeal, Petro, Johnson Oil, and Meenan Oil purport to appeal from the order of February 24, 2011, which granted their cross-motions for summary judgment and dismissed plaintiff's complaint against them with prejudice as barred by the statute of limitations. Cross-appellants maintain that, in addition to the dismissal on statute of limitations grounds, the claims against them should have been dismissed because they never delivered oil to the site.
We note that prior to the filing of their notice of cross-appeal, the motion judge had already granted their motions for summary judgment based on the statute of limitations. Thus, at the time they filed their cross-appeal, Petro, Johnson Oil, and Meenan Oil were not aggrieved by the judgment they sought to appeal.
Although the filing of a cross-appeal by these defendants is improper given that the judgment entered below was in their favor, defendants may raise the argument as an alternative basis to sustain the judgment below.
A Spill Act defendant may raise non-responsibility in-fact as a defense to a contribution claim.
Petro, Johnson Oil, and Meenan Oil argue that plaintiff's negligence claims should be dismissed because they are ancillary and incidental to the Spill Act claims. They cite no law in support of that contention. Although plaintiff would not be entitled to a jury trial on claims that are merely ancillary and incidental to a principal Spill Act claim,
Petro, Johnson Oil and Meenan Oil also argue that plaintiff's negligence claims should be dismissed because plaintiff failed to establish a prima facie case. They contend that without expert testimony there is no proof that they knew or reasonably should have known that fuel oil was leaking from the UST system. The motion judge did not consider this argument because he dismissed the negligence claims on statute of limitations grounds.
Claims of common law negligence arising from damage to property are governed by a six-year statute of limitations.
In our prior decision, we upheld the trial court's finding that the circumstances here do not justify affording plaintiff the benefit of the discovery rule. 432
The Supreme Court's decision did not disturb that conclusion. 220
The Hsi defendants argue that the dismissal of the claims against them should be affirmed because they were not contractually obligated to inspect, maintain or repair plaintiff's property.
The only defenses that may be raised to a claim for contribution under the Spill Act are those specifically set forth in the Act itself.
Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.