8,400 tons of soil contained in the lagoon and floor drain A. The first 600 tons of zinc and petroleum hydrocarbon contaminated soil were disposed of at an approved landfill in Ohio, at plaintiffs' expense. However, based upon a change in New Jersey's waste flow policy, an additional 7,800 tons of similarly contaminated soil were disposed of at the Hackensack Meadowlands landfill for use as recyclable daycover. Plaintiffs claim that this excavation and relocation took years to complete because plaintiffs exhausted their funds in 1989 and K&E refused to provide any assistance until after May 1990 and again in May 1991. In May of 1990, K&E provided $ 190,000 in initial funding under an Interim Cost Sharing Agreement ("Agreement"). The Agreement was designed to allow K&E to fund a portion of the ongoing cleanup in order to mitigate the potential damages against it in this case. These moneys funded portions of continuing work, such as the disposal of the remaining excavated lagoon soil at the Hackensack Meadowlands Landfill and the implementation of the groundwater investigation plan. In 1991, K&E agreed to pay an addition $ 183,000 under the Agreement. As a result, to date K&E has paid a total of $ 383,000 toward the cleanup.
Prior to K&E providing initial funding and assistance in May of 1990, plaintiffs spent $ 264,324.76 to begin the initial soil and groundwater investigation, analyze the problems and alternatives, excavate the soil, and remove the first 600 tons of soil to Ohio. They subsequently spent $ 22,397.25 for the design of a groundwater investigation plan. It is these $ 286,722.01 in past expenses that plaintiffs still seek from K&E.
Thereafter, plaintiff expended another $ 2,967.47 for groundwater well sealing and closure. Plaintiffs total unreimbursed expenses for investigation, analysis and cleanup total $ 289,689.48.
In 1991, NJDEPE approved the cleanup and issued ECRA clearance for the property.
C. Procedural History
Plaintiffs instituted this action to obtain contribution from defendants for clean-up of the site. Plaintiffs filed the original Complaint on or about May 16, 1989 in the Superior Court of New Jersey, Law Division, Morris County. Defendants filed a Notice of Removal to this Court on or about June 5, 1989. After a Consent Order Extending Time to Answer was filed, K&E and Azon answered the Complaint on or about August 4, 1989. A motion to remand the case to Superior Court was denied by Order entered on or about January 9, 1990.
Plaintiffs filed a First Amended Complaint on or about February 27, 1990. Defendants answered the First Amended Complaint on or about April 26, 1990. Two substantive motions have previously been decided in this case. First, on August 24, 1992 I denied K&E's motion to enforce a settlement agreement. Second, on February 9, 1993, I granted in part and denied in party Alfred Busch's motion for summary judgment. Thereafter, the individual defendants (William Keller, Robert Keller and Alfred Busch) settled with plaintiffs. The only remaining parties in this case are K&E and Azon.
Subsequently, plaintiffs filed a Second Amended Complaint against K&E and Azon on or about February 1, 1993, which defendants answered on or about March 16, 1993. The present motions concern the Second Amended Complaint which contains the following claims: (Count I) Nuisance; (Count II) Breach of Covenants and Deeds; (Count III) Strict Liability; (Count IV) Statutory Violations under state and federal law; (Count V) Indemnification; and (Count VI) Contribution.
There has been full discovery in this case. Numerous depositions have been taken, and interrogatories and documents have been exchanged.
STANDARD OF REVIEW
Summary judgment is appropriate where the moving party establishes that "there is no genuine issue of material fact and that [it] is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c) The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the non-moving party to carry its burden of proof. Celotex. Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
Once the moving party has carried its burden under Rule 56, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts in question. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986), rev'g, 723 F.2d 238 (3d Cir. 1983). The opposing party must set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations or denials of its pleadings. Sound Ship Building Co. v. Bethlehem Steel Co., 533 F.2d 96, 99 (3d Cir. 1976), cert. denied, 429 U.S. 860, 50 L. Ed. 2d 137, 97 S. Ct. 161 (1976).
The Supreme Court has explained that in evaluating the evidence presented, "where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Wahl v. Rexnord, 624 F.2d 1169, 1181 (3d Cir. 1980). When ruling on a motion for summary judgment the court must also consider the relevant burdens of proof at trial. Celotex Corp. Catrett, 477 U.S. 317, 322-24, 91 L. Ed. 2d 265, 106 S. Ct. 2548. See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
I. Azon's Liability
Plaintiff argues that Azon is liable under the Spill Act, N.J. STAT. ANN. § 58:10-23.11 et seq., as a parent and successor corporation.
The New Jersey Supreme Court has recognized two ways that a parent corporation can be held liable for actions of its subsidiary under the Spill Act. The first is if a court finds that the corporate veil can be pierced because the subsidiary is "'a mere instrumentality of the parent corporation.'" State Department of Environ. Protection v. Ventron Corp., 94 N.J. 473, 500-01, 468 A.2d 150 (1983) (quoting Mueller v. Seabord Commercial Corp., 4 N.J. 28, 34-35 (1950)). The plaintiff must prove that the parent so dominated the subsidiary that it had no separate existence but was merely a conduit for the parent. Ventron, 94 N.J. at 501. "Even in the presence of corporate dominance, liability generally is imposed only when the parent has abused the privilege of incorporation by using the subsidiary to perpetrate a fraud or injustice, or otherwise to circumvent the law." Id. There is no competent evidence being asserted to show that Azon purchased the assets of the former K&E to perpetrate a fraud or injustice such that piercing the corporate veil would be proper on that ground.
The second method, as noted by the Ventron court, to hold a parent corporation liable under the Spill Act is to find that it was "in any way responsible for the discharge." Id. at 502. (quoting N.J. STAT. ANN. § 58:10-23.11g(c)). According to the Ventron court, if it can be shown that the parent corporation had ownership or control over the property at the time of the discharge, the parent corporation may be held liable. Ventron, 94 N.J. at 502. In Ventron, the court held the parent corporation liable because the court found that the parent permitted the subsidiary to use the property as a mercury dump, that the parent corporation was the sole shareholder and that all the members on the subsidiary's board were employees of the parent corporation. Id. at 502. Viewing these facts together, the court concluded that the parent corporation was "responsible" within the meaning of the Spill Act. Id. Azon cannot be held liable under the Spill Act under the "in any way responsible" standard discussed in Ventron because Azon did not own K&E until approximately 20 years after the discharging had ceased.
Lastly, plaintiffs assert that Azon should be held liable as a successor corporation. In New Jersey, the traditional corporate law rules provide that where one company sells or otherwise transfers all of its assets to another company the latter is not liable for the liabilities of the transferor, including those arising out of the latter's tortious conduct. Ramirez v. Amsted Indus., Inc., 86 N.J. 332, 431 A.2d 811 (1981). However, there are five recognized exceptions to this general rule where the purchasing corporation will be held responsible: (1) the purchaser expressly or impliedly agrees to assume such debts and liabilities; (2) the transaction amounts to a consolidation or merger of the seller and purchaser, (3) the purchasing corporation is merely a continuation of the selling corporation; (4) the transaction is entered into fraudulently in order to escape responsibility for such liabilities and (5) there was an absence of considerations for the sale or transfer. Id. at 340-341. Plaintiff asserts that the third exception is applicable here.
In Ramirez, the New Jersey Supreme Court broadened the law holding a purchaser liable after it has purchased all the manufacturing assets of another corporation and the successor corporation continues essentially the same manufacturing operation as the predecessor corporation. The Ramirez court held that "where one corporation acquires all or substantially all the manufacturing assets of another corporation . . . the purchasing corporation is 'strictly liable for injuries caused by defects in units of the same product line, even if previously manufactured and distributed by the selling corporation or its predecessor." Id. at 358. The court relied on the tripartite policy analysis of Ray v. Alad Corp., 19 Cal. 3d 22, 560 P.2d 3, 136 Cal. Rptr. 574 (1977), which considers,
(1) The virtual destruction of the plaintiff's remedies against the original manufacturer caused by the successor's acquisition of the business,