LINK BETWEEN POLLUTION AND ALLEGED POLLUTER REQUIRED

Business owners hit with environmental cleanup costs scored a major victory two weeks ago when the New Jersey Supreme Court held that to obtain damages under the Spill Act, the Department of Environmental Protection ("DEP") must demonstrate, by a preponderance of the evidence, a reasonable connection between the discharge, the discharger, and the contamination at the damaged site. The ruling, in Department of Environmental Protection v. Dimant, upheld two lower courts that found insufficient evidence a Bound Brook laundromat and dry cleaning establishment caused the groundwater pollution for which it was targeted by DEP for investigative and cleanup costs.

Dimant deals with the alleged discharge of PCE by Sue’s, a Laundromat, into numerous residential wells located in Bound Brook and employment of the Spill Act’s various remedies.  To summarize, the Spill Act strictly prohibits the discharge of hazardous substances and establishes a broad scope of liability for offenders. N.J.S.A. 58:10-23.11c.  A “discharge” occurs when a hazardous substance is spilled or otherwise released “into the waters or onto the lands of the State, or into waters outside the jurisdiction of the State when damage may result to the lands, waters or natural resources within the . . . State.” N.J.S.A. 58:10-23.11b.  A spill within the state constitutes a discharge and is subject to various remedies which can be injunctive, investigative, or remedial in nature. Here, the Court found Sue’s committed a “discharge” by operating a business where a pipe leaked fluid containing PCE onto the ground because its actions resulted in the leaking of hazardous substance onto the lands of the State. According to the Court, because there are not even minor exceptions to the prohibition against discharging hazardous substances, the only question to be determined was whether the DEP connected the discharge at Sue’s to the relief it sought against Sue’s which was investigative and cleanup costs.

New Jersey’s Spill Act is considered to be one of the founders of “clean up” legislation; the purpose of the Spill Act is to provide liability for damage sustained within this State as a result of any discharge of hazardous substances, anyone who is “in any way responsible for any hazardous substance” is strictly liable, upon its discharge, for “all cleanup and removal costs no matter by whom incurred.” N.J.S.A. 58:10-23.11g(c)(1).  Cases discussing the phrase “in any way responsible” emphasize a requirement that the State show some connection between discharger to the discharge. Attention thus turned to determining what proof DEP was required to present in order to prevail? The Court looked to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and determined it would be inappropriate to adopt the CERCLA standard because that statute requires only “some connection”.

The Court then looked at the legislative history and determined that the legislature intended to distinguish between damages and cleanup expenditures, with liability for cleanup costs to be imposed without regard to fault.  But does that mean DEP must show proximate causation in order to prevail on a claim for damages?  In the Court’s opinion, no — while some causal link is required to obtain damages, the Court found that placing a proximate-cause requirement on DEP would thwart the purpose of the Spill Act. Rather, to accommodate the Spill Act’s various forms of relief, the Court held that the discharger must be shown by a preponderance of the evidence to have committed a discharge.  Proof that a defendant produced a hazardous substance and that the substance was found at the contaminated site (as was the situation in Dimant) is simply not enough in the Court’s opinion. On proof of the existence of a discharge, DEP can obtain injunctive relief under the Spill Act. In an action to obtain damages and costs however, the Court held that there must be a reasonable link between the discharge, the discharger, and the contamination at the specifically damaged site.  Otherwise, you end up with the situation in Dimant. 

In Dimant, DEP tested two sites at Sue’s 1988- 10 years prior to any action being taken against it.  At one site, DEP found PCE dripping from machines inside the laundromat into a sanitary sewer system which was determined not to be the cause of the contamination.  At the second site, on one occasion DEP observed PCE dripping from a pipe outside onto the ground.  The Supreme Court found no reason to disturb the findings that the DEP’s proofs were inadequate to obtain the relief sought from Sue’s. The Court agreed that the proofs failed to connect the discharge from the pipe, during Sue’s operation, to the soil or groundwater damage. The Court also agreed that DEP never presented sufficient proof for how the drip of fluid containing PCE observed at Sue’s on one day in 1988 resulted in the contamination of the groundwater in Bound Brook.  In the Court's opinion, the fact that DEP never retested the pipe again or took pictures of the drip was properly determined by the lower court to suffice as circumstantial evidence that the DEP did not consider the drip to be of significance regarding its investigation of the source of the groundwater contamination.  As such, DEP’s claims for relief for loss of natural resources and for reimbursement to the State for the cost of remedying the groundwater contamination were appropriately rejected.

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com.  

More Case Dismissals Coming From Municipal Court?

With passage of New Jersey Senate bill S2169, more people would be eligible for having charges dropped against them in municipal court.  Otherwise known as a conditional discharge, this pre-trial intervention program from municipal court was only available to first-time drug offenders who had never participated in a pre-trial intervention program.  The program, which is run by the probation department, is usually for 12 months; and upon successful completion of the program, the charges against the defendant are dismissed. 

One caveat for those considering taking a conditional discharge is that a subsequent arrest for something more serious will preclude you from participating in a future pre-trial intervention program.  Likewise, if a person does not successfully complete the program, the person's case will be referred back to the municipal court for prosecution and the person is also precluded from taking advantage of a pre-trial intervention program in a future case as well.

I have been a big supporter of expanding the conditional discharge program to other offenses and glad to see that this may finally become a reality and awaits the Governor's signature.  That being said, the Senate bill did not make the program available to all offenses (rightfully in my opinion).  The program would not be available if you already participated in a conditional discharge or other pre-trial intervention program.  It would also not be extended to those charged with organized criminal or gang activity; a continuing criminal business enterprise; a breach of the public trust by a public officer or employee; domestic violence; an offense against the elderly, disabled or minor; any motor vehicle offense involving alcohol or drugs; animal cruelty and certain disorderly persons offense.

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com. 

SILENCE DURING DWI STOP IS NOT EVIDENCE OF GUILT

The New Jersey Supreme Court ruled yesterday that silence by a defendant at or near the time of his arrest for DWI cannot be used as evidence of guilt or to impeach the person's credibility at trial.  In both the municipal court and Law Division, the judges had drawn an inference of guilt from the defendant’s silence at the accident scene and ruled that he had allowed operation of his vehicle by an intoxicated person in violation of N.J.S.A. 39:4-50(a). The Supreme Court reversed, holding that a person's federal constitutional and state statutory and common law right to remain silent applies in the context of New Jersey DWI cases and that silence by the defendant "at or near the time of arrest" may not be used to infer guilt or impeach credibility at trial.  After a lengthy discussion of an individual's right to remain silent, the N.J. Supreme Court held it was "undisputed" that until the defendant was questioned and issued a summons, he was not free to leave the scene of the accident.  Thus, Defendant’s silence occurred “at or near” his receipt of a summons at the scene for a violation of N.J.S.A. 39:4-50, the functional equivalent of an arrest.  In the Supreme Court's opinion, the defendant's silence should not have been used for any purpose assess guilt or credibility -- and the Law Division’s reliance on that silence constituted error.  The link to State v. Stas is:  http://www.judiciary.state.nj.us/opinions/supreme/A1411StatevManafStas.pdf

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com.

IT'S REALLY QUITE SIMPLE: CONTRACTORS, TAKE OFF THE "ORS" AND GET YOURSELF A CONTRACT!

I am always amazed when contractors come into my office looking for legal advice and they cannot understand why in the world a customer is suing them for consumer fraud.  "We were friends", "He said we did not need a contract", "Why should I have to tell her what materials I'm using" - and the list of mishaps goes on and on and on (even though the N.J. Administrative Code spells out quite clearly what every home improvement contract must have).  If you care about your contracting business, then you need to start incorporating into your thought process scenarios where you can envision a problem (i.e., will I get sued for this?).  If you don't, then you (yes, you, individually) and your company are just asking for a problem.  I am a firm believer that everyone needs to read Sun Tzu, "The opportunity to secure ourselves against defeat lies in our own hands".  Had the defendant in Chaykowsky v. Marut followed that advice, they would not be looking at a judgment of over $2.5 million dollars!

In Chaykowsky, the defendant operated a landscaping business and entered into an agreement with a homeowner to build a number of projects for the agreed upon sum of $750,000.  Plaintiff paid the entire sum as invoices were presented.  Of course, the defendant never used a contract, never informed the homeowner about the materials it would supply and use at the job and never provided a schedule of when the project would begin and end.  Coupled with nearly $200,000 in additional monies that had to be paid, inexcusable delays by the defendant (or no work at all) and requests for even more money to complete the project, the plaintiff eventually got tired of the defendant's antics and sued the company and the individual owners of the company for violating the N.J. Consumer Fraud Act ("CFA").

We need not bother ourselves with the nitty gritty procedural aspects of the case but needless to say the defendant did not comply with its discovery obligations thus resulting in dismissal of their answer counterclaim and third-party complaint with prejudice.  The lower court also denied defendant's subsequent attempt to restore their pleadings and entered judgment against them in the amount of $2,510,798.22 - finding that plaintiff sustained compensatory damages in the amount of $802,774.00 and that defendant violated N.J.A.C. 13:45A-16.2(a)(12) by failing to have a written contract.  The lower court thereafter awarded plaintiff $1,605,548 in statutory damages (remember the CFA provides for TREBLE/TRIPLE damages), $98,612.50 in attorney's fees and $3,863.72 in costs (all recoverable by a plaintiff who successfully pleads consumer fraud).

The Appellate Division upheld the lower court's findings and judgment and remanded the case (meaning sent it back) to the lower court for the purpose of determining an appropriate award of legal fees and costs of suit to the plaintiff and to determine whether whether the individual defendants are liable for the plaintiff's damages.

Click on Chaykowsky v. Marut for the entire opinion. http://www.judiciary.state.nj.us/opinions/a2901-10.pdf

Are you a contractor who needs advice on how to protect your individual and business assets from attack.  Call us today and make an appointment to see how we can help.

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com. 

REAL ESTATE – FORECLOSURE: DOCTRINE OF LACHES UTILIZED TO PREVENT HOMEOWNER FROM VACATING DEFAULT JUDGMENT

The doctrine of laches is an interesting concept.  Although pled with a fair amount of regularity, it is a defense to a claim that is employed sparingly.  The doctrine of laches can be defined as a bar to any delay in enforcing a known right which cannot be explained or excused and, as a result, the other party has been prejudiced because of such delay.  In this foreclosure action, PHH Mortgage Corp. v. Krowicki, laches is used to prevent a homeowner from vacating a default judgment of foreclosure entered in 2007 and well after the sale of the property to an innocent third party.  According to the Court, with all of Defendant’s posturing, motion practice, bankruptcies and attempts at mediation regarding the foreclosure, it never once challenged the default judgment until Defendant was out of options.  Unfortunately, Defendant waited too long to enforce a right which it was clearly aware of.  Similarly, the doctrine of equitable estoppel also barred relief for the same reason.  The court also rejected Defendant’s argument, raised for the first time on appeal (see the common thread running through the Defendant’s prosecution of this case), that the Plaintiff bank lacked standing because it did not possess the 1998 note when it filed the complaint, because the judgment and sale were entered and accomplished in 2007 and 2010, well before the Supreme Court adopted substantial amendments to the rules governing foreclosure actions.

Bottom line, DO NOT WAIT and hope for the best when it comes to a foreclosure action.  Contact competent legal counsel to find out your rights.

Click on PHH Mortgage Corp. v. Krowicki for the entire opinion.  http://www.judiciary.state.nj.us/opinions/a1654-11.pdf

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com.